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Zhang Zhongmou emphasizes that the United States has high costs for building factories, and Taiwan, China has strong semiconductor competitiveness, and operations need to be placed in Taiwan, China. However, some of Liu Deyin's statements in are contrary to Zhang Zhongmou's ideas.
Liu Deyin said that mainland China accounts for 10% of the business. The intentional emphasis on the importance of the largest US market in words, and Liu Deyin's move to let TSMC go to the United States to build a factory is not in line with Zhang Zhongmou's requirements for pursuing costs.
Liu Deyin's repeated actions are a showdown? Liu Deyin believes that mainland China has a small proportion of business. Have you really seen the situation clearly?
The sober Zhang Zhongmou, the confused Liu Deyin
Zhang Zhongmou is the founder of TSMC. After retiring in 2018, he handed over the position of chairman of TSMC to Liu Deyin. Liu Deyin's ability is definitely outstanding to be Zhang Zhongmou's successor.
I thought Liu Deyin could lead TSMC to the right track, but I didn't expect that Liu Deyin overturned many of Zhang Zhongmou's principles and did not make the right choice in terms of business strategy.
In the face of major issues, Zhang Zhongmou is very clear-headed, such as TSMC's factory construction in the United States. Because TSMC announced to build a factory in the United States in 2020, Zhang Zhongmou had retired for more than two years, and TSMC's decision was not made by Zhang Zhongmou.
However, in many forum speeches, Zhang Zhongmou mentioned that the United States’ supply chain is incomplete and faces high production costs. It is impossible for the United States to promote the local chip manufacturing. In addition, Zhang Zhongmou also bluntly pointed out that building a factory in the United States was a futile move.
Why Zhang Zhongmou can lead TSMC to the world's number one and become the world's largest chip manufacturer is because he can see clearly, see through, and know what layout strategy is most beneficial to TSMC.
has an important principle in TSMC's strategy, that is, not to compete with customers and focus on chip foundry services. By the same token, this principle applies to not participating in competition among countries.
Once there is a biased move, it will only follow the trend. Just like TSMC Chairman Liu Deyin lost the second largest customer after abiding by market rules, she was unknowingly led to the path she shouldn't have taken. What will this lead to? Obviously, when building chip factories, laying out production capacity, and seeking customer cooperation, they are easily disturbed by external forces.
Zhang Zhongmou looked at the changes in the semiconductor industry structure clearly and advised him to put operations in the headquarters area and pay attention to the right to choose independently.
However, Liu Deyin fell into confusion. Not only was he involved in the competition between countries, he did not realize the importance of losing the second largest customer, and believed that this part of the orders would be easily filled.
Little did you know that Liu Deyin had already hit others' words, and losing the second largest customer also means losing the potential future of the mainland market. TSMC's business in the mainland has been reduced, and the revenue share of the US market continues to rise. Therefore, Liu Deyin once again made a harsh statement, saying that the mainland only accounts for 10% of TSMC's business.
If that is the case, what proportion of the US market is that Liu Deyin values? According to TSMC's revenue and financial report, the U.S. market accounts for 64% of TSMC's share.
Liu Deyin is a showdown, standing on the standpoint of a businessman, simply distinguishing market share . The nature of businessmen's profit-seeking is very obvious. In the face of interests, some layouts will be significantly different.
For example, TSMC has expanded production by 28nm in mainland China, but has built a 5nm chip factory in the United States, leaving chip production capacity to US corporate customers such as Apple , and other market customers can only get a small part of the production capacity. In order to win subsidies from the United States, Liu Deyin asked TSMC to build factories in the United States, preferring to withstand cost pressures than to obtain a maximum of billions of dollars in subsidies.
Did Liu Deyin really see the situation clearly?
Liu Deyin should understand that the US market is not an ideal place to build a factory. First, there is no supply chain advantage, huge cost, and second, there is no talent advantage, and it faces a labor shortage. More than that, once the factory is built, with the intervention of US capital over time, it is unknown whether TSMC can achieve 100% of the voice of US factories.
Back to Liu Deyin’s view on mainland business, has Liu Deyin really seen the situation clearly? If we only look at the data, Liu Deyin can only see the proportion of local markets in TSMC's revenue. But the mainland has a good factory construction environment and the hydropower resources required for building chip factories. These are ideal options for laying out chip factories.
Furthermore, China is the largest chip consumer, and the chips of TSMC customers need to be sold to the Chinese market. On the consumer side, mainland China consumes at least half of TSMC's chips. Although TSMC mainly produces OEM for US companies, which US companies do not treat mainland China as an important chip market.
If the chips of US companies cannot be sold smoothly, or if the Chinese companies have a source of self-sufficiency chips, can TSMC really move forward and backward freely?
And don’t forget that the United States is vigorously developing chip manufacturing. Intel , Samsung have all been to build factories in the United States. TSMC’s 5nm factory built in the United States is not the most advanced. How many orders will TSMC get from US companies then?
If you could think about this clearly, maybe Liu Deyin would not have made the same statement. At least Liu Deyin should realize that some markets cannot be measured by share.
summary
Liu Deyin did not listen to the advice of the founder Zhang Zhongmou, which was contrary to some of Zhang Zhongmou's concepts and principles. I just hope that before everything is settled, Liu Deyin can let TSMC return to the right direction and let TSMC decide its future.
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