Zhang Zhongmou or Morris Chang, his American name, was born in China, where he studied until his first year of college in Shanghai. He left to attend MIT, making a career in the United States until founding TSMC in Taiwan.
It is now the largest chip or semiconductor manufacturer in the world. The company produces 92% of the most advanced models that are needed to make everything from smartphones to missiles.
A little over a month ago, he was publicly interviewed at Brookings, a Washington institution, on the topic “Can semiconductor manufacturing return to the US?” It was merciless.
“For starters, there is a lack of talent,” he said, recalling that TSMC has had a factory in the US state of Oregon for 25 years and has tried everything, “but the difference in cost has remained the same, the same product costs 50 % higher than in Taiwan”.
Now, “at the request of the American government” and with the promise of a subsidy, it is setting up a second factory. “But you’re talking about spending just a few tens of billions of dollars. Well, that won’t be enough.”
In short, “it will be a very expensive futility”, which will not be “competitive in world markets”, again.
Zhang was referring to the bill that aims to allocate US$ 52 billion to the US industry. In the weeks following his interview, according to the New York Times, “lobbying efforts” by semiconductor companies soared, demanding approval.
Eric Schmidt, former CEO of Google, signed an article in the Wall Street Journal striving to rebut Zhang’s arguments, sounding the alarm that “America is on the verge of losing the chip competition” to China.
Columnists in the Financial Times and the Washington Post have issued warnings, with more attempts to respond to Zhang — and with regret for “our dysfunctional system” that fails to approve the money.
The WSJ reported that Intel had postponed its new factory, due to uncertainty, and CNBC highlighted the appeal of the American company’s CEO to congressmen: “Please don’t waver”.
Little given to lobbies, Bloomberg reported this Friday (1st) that the demand for semiconductors, in fact, began to fall, following the growing perspective of recession in the USA. The same is true in South Korea.
An economy with no recession in sight is China’s. And the same Bloomberg comes to report that, after three years, “US sanctions help China to boost its chip manufacturing”, with success stories such as the Wuhan YMTC, reported by the Japanese Nikkei.
Bloomberg reported that in China “the main trend is the search for self-sufficiency” in semiconductors. On Thursday (30), on a visit to Wuhan, as highlighted by the South China Morning Post to the American newsletter Sinocism, Xi Jinping emphasized: “self-reliance in technology” and “independence in development”.
At Brookings, Zhang had regretted that he could no longer sell to Huawei and other Chinese companies because of the US embargo. “But I hope that changes. Everyone stays friends. That’s how TSMC prospered, being a semiconductor supplier to everyone. Again, to everyone.”
He said he does not foresee war for Taiwan. But he added that if it happens, chips will be the least of the problems.
