Regarding TSMC’s establishment of factories in the United States, its founder Zhang Zhongmou has always been opposed. I feel that building a factory in the United States is very costly. Without talent and supply chain advantages, it is futile to force core manufacturing in the Un

Regarding TSMC’s establishment of a factory in the United States, its founder Zhang Zhongmou has always been opposed. I feel that building a factory in the United States is very costly. Without talent and supply chain advantages, it is futile to force core manufacturing in the United States.

But when importing equipment into TSMC’s U.S. factory, Zhang Zhongmou said that he had always wanted to build a factory in the United States and was ready. Why did Zhang Zhongmou change his tune? TSMC builds a factory in the United States, whose cheese is touched?

Zhang Zhongmou’s lament

Zhang Zhongmou is an old man who has been in the semiconductor industry for half a century and has a clear understanding of the global chip industry. When TSMC invested heavily in building factories in the United States, Chang was opposed to it. The reason is simple, because Zhang Zhongmou has already experienced a failure in building a factory in the United States.

25 years ago, TSMC built a chip factory in Oregon, USA. Judging from the operating conditions of this factory, the cost was 50% higher than that in Taiwan Province. The cost was prohibitively high.

The failure of this factory made Zhang Zhongmou realize the various problems of manufacturing chips in the United States. On the one hand, the cost is very high. On the other hand, the U.S. manufacturing industry has been dormant for decades and does not have the conditions to invest in manufacturing chips.

Just imagine, when a market industry has been silent for decades, how can a complete industry chain be formed locally? Without a market, it cannot support the demand, and talent training, industrial chain technology development, etc. will lag behind.

In desperation, American companies had no choice but to produce chips in Asia, with TSMC, Samsung and other giants responsible for manufacturing. The United States has become an export country for IC chip design orders, and chip manufacturing is no longer the strength of the United States.

It is not difficult to understand why Zhang Zhongmou is opposed to TSMC building a factory in the United States to make cores. After all, the cost, industrial chain and talent shortage issues will put TSMC under huge pressure to build factories. But just when the outside world thought that Zhang Zhongmou would always oppose the construction of factories in the United States, Zhang Zhongmou suddenly changed his tune.

At the equipment introduction ceremony of TSMC's US factory, Zhang Zhongmou said that he has always hoped to build a factory in the United States and is ready this time.

Zhang Zhongmou’s attitude has obviously changed. From opposing the construction of the factory to supporting the construction of the factory, why did Zhang Zhongmou change his tune? Perhaps it has something to do with the changing trend of globalization.

While changing his words, Zhang Zhongmou also emphasized: "Globalization is almost dead, and free trade has almost disappeared."

In other words, Zhang Zhongmou knows that globalization is dead, and it will be difficult for Backstage Semiconductor Manufacturing Co., Ltd. to obtain generous returns on orders in a free trade market environment. So in order to ensure revenue and make a lot of money, TSMC finally chose to build a factory in the United States.

In this way, TSMC can get closer to customers. As long as it can ensure long-term order support from US customers, TSMC can stabilize more than 60% of its revenue structure. No matter how globalization changes, TSMC's position in the hearts of American customers will not be shaken.

Zhang Zhongmou lamented that globalization is dead, which reflects the gap between ideals and reality. Zhang Zhongmou’s opposition to the establishment of factories in the United States was based on the ideal pursuit of costs and global benefits. Zhang Zhongmou’s change of tune was a forced compromise in the face of reality.

If TSMC does not build a factory in the United States, in the future Intel , Samsung will increase its layout in the United States, and it will easily take away orders from American customers from TSMC. Not to mention the future, these competitors are already eyeing TSMC's customer resources and trying their best to poach them. Judging from all circumstances, TSMC seems to have only one option to build a factory in the United States.

TSMC builds a factory in the United States, whose cheese is touched?

TSMC's decision to build a factory in the United States can be said to be a source of joy for some companies and a source of sorrow for others. The United States is naturally happy to hear about it and is willing to promote TSMC to vigorously develop chip manufacturing in the United States. Not even just 5nm factories, TSMC will continue to build 3nm factories in the United States.The initial investment of US$12 billion has further increased to US$40 billion, and the wafer production capacity is planned to 600,000 pieces/year.

When TSMC was so aggressively involved in building factories in the United States, the old man in the United States said excitedly: "Made in the United States is back."

They were happy, but the people on the island felt deeply worried. Because TSMC's status in Taiwan Province is equivalent to the "Sacred Mountain that Protects the Island" and "The Divine Needle that Dinghai", only with TSMC's presence can the entire semiconductor industry in Taiwan Province thrive.

Therefore, TSMC’s establishment of a factory in the United States has actually shaken up the local semiconductor industry. You know, Taiwan Province's semiconductor output value exceeded US$100 billion in 2021. Semiconductors accounted for 34.8% of the total export share and contributed 20% to the local manufacturing industry.

TSMC alone supports most of the semiconductor industry trade. Because of TSMC, world-class American companies such as Apple, Qualcomm, Nvidia, AMD, and Intel need to come to cooperate. You can imagine how much economic value TSMC brings to the local area.

But in the future, if American customers can buy chips at home, will they still go to Taiwan Province to purchase chips? Not only that, transporting equipment and talents from the TSMC headquarters area to the United States will also cause the loss of the local semiconductor industry. In the words of the people on the island, it is hollowed out.

is written at the end

In order to cope with the changes in globalization, TSMC insists on building factories in the United States and increasing investment. From the perspective of making money, there is no problem. However, from the perspective of the future industrial chain prospects, TSMC will have fewer and fewer retreats. Whether it is right or wrong to build a factory in the United States is probably no longer important from the moment TSMC goes to build a factory in the United States.

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