TSMC founder brands Intel’s US expansion plans an ‘exercise in futility’
The US doesn’t have the fabrication talent pool to successfully grow its chipmaking capabilities, Morris Chang suggests
The US' ambition to grow its own semiconductor manufacturing capabilities are "a wasteful, expensive exercise in futility", according to the founder and former CEO of Taiwanese chip manufacturer TSMC, Morris Chang.
Chang, a prominent figure in the semiconductor space, expressed the criticism as a guest at an event held by the Brookings Institution think tank.
He said the US simply doesn't have the fabrication talent pool to successfully expand its chipmaking industry, while the cost of producing chips in the country is 50% higher than in Taiwan.
Chang added that Taiwan’s large population was a key component in TSMC’s manufacturing success, with the firm able to leverage a large talent pool to become a “pure play” chip foundry. By contrast, the US has seen professionals move away from manufacturing – a change that has instead seen the county build up a design talent pool that is "the best in the world".
Intel has made no secret of the fact it's championing an expansion of chip manufacturing in the country, leading this drive to ramp up foundry capabilities with significant investment in recent months.
To grow a successful chip manufacturing industry, however, Chang suggested the US will need to solve its fabrication talent shortages, as well as find a way to work around the significantly larger costs.
The Biden administration has recently pledged billions of dollars in subsidies to boost the US industry – but Chang says this will not be sufficient.
"Right now, you're talking about spending only tens of billions of dollars of money of subsidy,” he said at the event. “Well, it's not going to be enough. I think it will be a very expensive exercise in futility".
The comments come as appetite continues to grow among US businesses to simplify and protect their supply chains from global the kind of global interruptions it has experienced in recent years.
To highlight this, a significant amount of the government’s subsidy fund will go towards Intel’s $20 billion new chip manufacturing site in Ohio. The chip giant is investing in its US chipmaking capabilities to help prevent an over-reliance on manufacturers in the APAC region and any potential future component shortages.
Sharpen your manufacturing competitive edge
Smarter asset managementFree Download
The firm has also revealed plans to invest a further $3 billion into an extension for its D1X factory in Oregon, designed to facilitate chip advancements for the likes of computers, 5G networks, and cloud servers.
With such efforts to build up an improved US industry, Chang said that production will see an uptick, but was steadfast in his warning that businesses such as Intel may find it tough to staff and fund such ambitions.
"There will be a high per-unit cost increase, and it will be hard for the US to compete internationally," he added.
Chang did, however, note that any potential war between China and Taiwan would change the state of play, making these plans suddenly look like a positive and worthwhile investment. If that doesn’t happen, the efforts could prove futile, he said.
IT best practices for accelerating the journey to carbon neutrality
Considerations and pragmatic solutions for IT executives driving sustainable ITFree Download
The Total Economic Impact™ of IBM Spectrum Virtualize
Cost savings and business benefits enabled by storage built with IBMSpectrum VirtualizeFree download
Using application migration and modernisation to supercharge business agility and resiliency
Modernisation can propel your digital transformation to the next generationFree Download
The strategic CFO
Why finance transformation propels business valueFree Download