TSMC CEO warns confidence will be undermined after US blacklists Chinese firms
CC Wei, chief executive officer of Taiwan Semiconductor Manufacturing Co., warned of the dangers of excessive government export controls that can undermine mutual trust between countries.
“Export controls and bans on products from other countries destroy the productivity and efficiencies gained through globalization, or at least diminish the benefits offered by a free market,” Wei said at an industry event in Taipei on Saturday. “But the scariest thing is that mutual trust and cooperation between countries is gradually weakening,” he added, saying that a distorted market translates into higher costs as he urged politicians to find an alternative solution.
The US blacklisted more Chinese companies earlier this week, escalating trade tensions. It has added dozens of Chinese tech companies to its so-called Entity List, making it almost impossible for them to source critical foreign components and fueling a trade tension between the world’s two largest economies.
Washington’s actions followed the Biden administration’s imposition of strict export controls two months ago to prevent China from buying or manufacturing cutting-edge semiconductors — crucial for the Asian nation to overtake the US in areas like artificial intelligence and supercomputing. Key US allies, including the Netherlands and Japan, plan to adopt at least some of the new US rules as well, Bloomberg News reported.
Multilateral export controls will bring many challenges to China’s chip industry, Wei said.
TSMC is now building factories in Arizona and Japan amid growing concerns from customers and major governments that global chip production is too centralized in Taiwan.
Wei said TSMC is building new factories to meet its customers’ demand instead of meeting requests from foreign governments.
He said the plant the Taiwanese chipmaker is building in Japan’s Kumamoto Prefecture aims to give Sony Group Corp. helping ship enough chips to TSMC’s biggest customer, a reference to Apple Inc. Apple has also said it will be the biggest customer for TSMC’s new plant in Arizona.
Wei also said it is not easy to replicate Taiwan’s chip industry in another country since TSMC’s success has been built over more than 30 years with the help of its suppliers.
“Globalization is almost dead. Free trade is almost dead,” said TSMC founder Morris Chang, speaking at the opening ceremony of a plant in Arizona last week. “I really don’t think they’ll be back for a while.”
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