The US is worried about over-reliance on TSMC
“The US should not be too dependent on TSMC. Otherwise, once the two sides are reunified, the US will be afraid to lose its advantage in semiconductor technology, and the US may become generation 2 behind China in chip technology instead of generation 2 ahead of China.”
The warning comes in a 756-page annual report to Congress released on March 1 by the National Council for Artificial Intelligence Safety.
What kind of company is TSMC? Why does the United States feel deeply worried about it while trying to coax it?
The world’s largest foundry for wafers
The market share is as high as 56%
Founded in 1987, TSMC, also known as Taiwan Semiconductor Manufacturing Corporation, is headquartered in Hsinchu Science Park, Taiwan, and has factories in all three scientific parks in Taiwan. It is the world’s first professional integrated circuit manufacturing services company and the world’s largest foundry and chip manufacturer.
A wafer is a silicon wafer used to make silicon semiconductor circuits. In plain English, a chip needs to be made from many wafers.
Chip production is an indispensable and important factor in modern manufacturing, and TSMC occupies an important position in the global chip production. TSMC ranks first with 56% market share, far ahead of No. 2 Samsung (18%), according to the Global Top 10 Founder Founders’ revenue ranking for the first quarter of 2021 released by CIG Consulting. According to US media reports, 65 percent of wafer production in the US market depends on Taiwan, the vast majority of which comes from TSMC.
TSMC is the benchmark of Taiwan’s high-tech enterprises and the most desirable enterprise for students and tech upstarts in Taiwan.
TSMC, which employs about 50,000 people in Taiwan, is a “behemoth”. Its water consumption accounts for one third of the total water consumption of Hsinchu Science Park. Electricity consumption accounts for 5% of the total. TSMC will use up to 10% of its electricity in the future after the EUV process is introduced, according to Tianya Magazine.
Process technology leading the world
The average employee earns 323,000 yuan a year
TSMC can be today’s position, largely thanks to his technology research and development and investment. According to media reports, there are only five companies in the chip industry that have mastered the 14 nanometer process technology. However, TSMC will achieve the mass production of 5 nanometer chips by 2020, and only Samsung can compete with TSMC at present. Moreover, TSMC is ready to start mass production of 3 nanometer chips and has made breakthroughs in 2 nanometer technology research and development.
At the beginning of TSMC’s establishment, researchers from the Taiwan Industrial Research Institute (referred to as the “Taiwan Institute of Industry and Research”) were the backbone. TSMC’s founder, Chang Chung-mou, was once president of ITRI.
Later, the company expanded, and TSMC more actively recruited technical personnel for research and development. TSMC now has nearly 6,000 research and development personnel and recruits more than 100 top doctors every year. TSMC spent $2.96 billion on research and development in 2019. More than $3 billion will be spent on R&D in 2020. Cumulative R&D spending from 2000 to 2019 is $24 billion.
According to the latest data, the average annual income (bonus and salary) of TSMC employees in 2020 is NT $1,39,100 (about 323,000 yuan).
Relying on TSMC carries risks
The United States wooed Taiwan Semiconductor Manufacturing to invest in the United States
In the 1990s, the U.S. was the dominant producer of semiconductor chips, accounting for about 37% of the world’s output. Today, the U.S. produces just 12% of the country’s chips. Today, more than half of the world’s chips come from TSMC, and the United States is particularly dependent on it. The US is also aware of the risks of relying too heavily on TSMC. On March 1, the United States Artificial Intelligence Security Council warned that “once the mainland reunifies Taiwan, the United States may lose its advantage in semiconductor technology, and the chip technology may become the second generation behind China instead of the second generation ahead of China.” Some U.S. lawmakers have made similar arguments. Foreign Policy magazine pointed out that TSMC has been drawn into the competition between China and the United States.
TSMC has been actively courted by the US government under President Donald Trump to open plants in Songjiang, Shanghai, and Nanjing. TSMC also plans to build a 12-inch wafer fab in Phoenix, Arizona. Construction of the new plant is expected to start this year and scale up production in 2024.
Since TSMC’s largest shareholder is the Taiwan government, the Democratic Progressive Party (DPP) government, which favors the United States and opposes the mainland, approved the high-tech investment project on December 23 last year.
In order to strengthen the edge of technology, Biden, after taking office, put forward the so-called “strengthening supply chain security in key industries,” including the semiconductor industry. According to the latest news from Taiwan media, TSMC will not only build one factory in the United States, but also build 6 new plants, which will become the non-American semiconductor plant with the largest capacity and the most advanced technology in the United States, surtaking rivals such as Samsung.