Menu
Situs Panduan dan Solusi Terkini

Deploying chip factories around the world will increase costs

  • Share
banner 468x60

Semiconductor Updates

banner 336x280

What a difference the year makes. When Taiwan Semiconductor Manufacturing Company held its 2020 annual shareholder meeting, the company had yet to confirm that it would go ahead with its plans to set up a chip plant in the United States.

Now, not only is TSMC’s new $12 billion manufacturing plant, or fab, underway in Arizona, but the company is also in advanced discussions about a plant in Japan and is even considering manufacturing in Germany.

This shift marks the end of an era in the semiconductor industry. Since its establishment nearly 35 years ago, TSMC has had almost all of its power in Taiwan.

This focus has helped make TSMC the world’s largest contract chip maker, with production now accounting for more than half of all custom-made chips globally. In turn, this size has made the company very profitable: It has gross margins of about 50 percent.

It also freed semiconductor companies from the United States, Europe and Japan to focus on areas other than manufacturing and create value without the huge investments that chip manufacturers require today.

But under pressure from governments in Washington, European capitals and Tokyo, the company’s management is taking a screwdriver to a well-lubricated machine, TSMC. Company president Mark Liu told investors this month that the “new geopolitical environment” called for TSMC’s fab to be more widely distributed outside its home base.

John Lee, a technology analyst at the Mercator Institute for China Studies in Berlin, says the push to reshape semiconductor manufacturing in different geographies was “a really state-driven thing”.

The resulting changes will likely affect the time-tested coexistence between TSMC and other parts of the semiconductor supply chain. In other words, the fab is scattered around the world at a price that TSMC customers have to pay.

According to a report by the Boston Consulting Group and the Semiconductor Industry Association (BCG/SIA) published in April, the total cost of ownership of the Fab in the United States is between 25 and 50 percent higher than in Asia.

In Europe, there is a 30-40 percent “cost defect” in chip manufacturing compared to production in Asia, according to Greg Slater, Intel’s executive director of regulatory affairs.

“It’s very hard to imagine that the money that is stumbled now will be enough to close that 40 percent gap,” Lee tells me of subsidies that Western governments promise TSMC and other chip makers if they build the Fab in their countries.

According to the BCG/SIA study, financial support from governments in China, Taiwan and South Korea accounts for 40 to 70 percent of manufacturers’ cost-advantage tranches that those countries enjoy compared to the United States.

TSMC has already made it clear that its customers will have to bear part of the cost. “[We] Facing manufacturing cost challenges. . . “Therefore, we are in the process of fixing our chip prices,” CEO CC Wei said earlier this month.

The question is what the changes will really gain.

Initially, the US government, which was the first to push for a reconfiguration of chip capacity, did so to reduce the defense supply chain’s dependence on foreign sources, particularly those vulnerable to interference from China.

But over the past year, under the shock of global chip shortages that have temporarily disrupted production at some automakers, governments have pressed for TSMC’s new ability to protect their industry from such bottlenecks in the future.

Industry experts say it would be impossible to achieve national security and supply chain resilience goals by moving chip capacity to a number of countries. Lee believes that the case for sites in the European Union may be weaker than that of the United States or Japan.

And in a worst-case scenario, efforts to shape the chip supply chain in accordance with the industrial policy objectives of different countries can damage or even break it.

Maurice Chang, a founder of TSMC who retired three years ago, recently warned that chip reconfiguration efforts were “turning back the clock” in the semiconductor supply chain.

Speaking as Taiwan’s envoy to the APEC, Zhang said, “What may happen is that after hundreds of billions and many years have been spent, the result will still be not completely self-sufficient and high-cost supply chain.”

kathrin.hille@ft.com

Referensi: www.ft.com

banner 336x280
banner 120x600
  • Share