TSMC’s Chang Has Not Ruled Out Building A US-Based Plant

January 13, 2017 - Written By Cory McNutt

Morris Chang, the chairman of Taiwan Semiconductor Manufacturing Company (TSMC), discussed the possibility of building a wafer fab manufacturing facility in the US. This talk all came about because of Donald Trump’s insistence on bringing manufacturing jobs back to the US. TSMC makes chips for Apple’s iPhone among other Apple products, and the pressure may be on Apple to create more jobs in the US, and TSMC is afraid that the fallout will spill over to them to build a plant in the States. In 2016, TSMC received 65-percent of its wafer revenue from North America, and they expect that figure to stay over 60-percent in 2017.

Chang cautions that building a plant in the US “may not necessarily be a good thing” for TSMC’s customers and believes that his company is already helping to create jobs in the US because of the products it manufacturers and ships to the region. Manufacturing in the US could cause prices of devices using their chips to increase because of the high US labor costs. The proximity of the current plants to their customers is also an issue that must be considered. It is easier to ship parts, solve issues, and talk to one another when the parts manufacturer is close to the purchaser.

TSMC is already looking for a suitable location to invest almost $16 billion in new facilities in Taiwan to build future 5nm and 3nm chips that will be in operation by 2022. The US has many locations where they could build the new plant, but that will likely never happen. TSMC is currently the largest chip manufacturer in the world with 55-percent of the global share. They provide chips to Apple, Media Tek, Huawei’s Kirin brand, and US chipmakers Qualcomm and Nvidia. Whether the incoming President will be able to force manufacturers to produce more products in the US with US workers in place of high tariffs is yet to be seen. TSMC is apparently concerned about the situation, and this could be only the beginning before other overseas tech companies are brought into the picture. Adding plants in the US could be a good thing for US workers, but it could also substantially raise the cost of electronic products considerably either because of the higher labor costs or import tariffs.