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Taiwan Benefits From TSMC’s Foreign Investments, Official Says

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Taiwan Semiconductor Manufacturing Co. has pledged to build three advanced plants in the U.S. state of Arizona with total investments exceeding $65 billion. | BLOOMBERG

(CTN News) – A senior government official has stated that Taiwan Semiconductor Manufacturing Co.’s (TSMC) intention to relocate a portion of its chipmaking operations overseas will be “extremely advantageous” for Taiwan. This decision will allow the chipmaker to more directly interact with customers and attract the most talented personnel.

The waning of Taiwan’s manufacturing dominance has been the subject of local commentary and opinion articles as TSMC establishes factories abroad. TSMC is reliant on Apple and Nvidia for their primary products, as they are the world’s largest contract chipmaker. The island’s critical involvement in the semiconductor supply chain is regarded as a critical element of its global security.

“Our semiconductor investment overseas is actually very beneficial to Taiwan, both economically and from a security perspective,” stated C.C. Chen, Taiwan’s Deputy Minister of Economic Affairs (May 21, interview). “They maintain a close relationship with their clients and are in close proximity to the most talented individuals.” Thirdly, they will work in conjunction with their clients to develop the most innovative and indispensable technology.

In the same vein, TSMC CEO C.C. Wei stated in 2022 that it is challenging to replicate Taiwan’s semiconductor business in other regions, as TSMC’s success was established over a period of over 30 years with the help of its suppliers.

In order to avert an additional wave of supply shortages that cause businesses to lose hundreds of billions of dollars in sales, significant countries worldwide are frantically attempting to increase domestic chip production. Additionally, these initiatives function as a buffer against the intensification of hostilities in the Taiwan Strait, as China persists in asserting its territorial claims over Taiwan. Samsung Electronics of South Korea and TSMC have been the most sought-after partners for semiconductor development assistance.

TSMC, a corporation headquartered in Hsinchu.

The company plans to build three state-of-the-art factories in Arizona, with a total investment of more than $65 billion. The United States is anticipated to provide $11.6 billion in grants and financing to partially finance the project. It is anticipated that the third U.S. plant will commence semiconductor production using technology that is 2 nanometers or more advanced before the end of the decade. It is expected that TSMC will commence the production of 2 nm semiconductors in Taiwan the following year.

Chen stated that the Taiwanese government has granted TSMC permission to manufacture less sophisticated 3 nm, 4 nm, and 5 nm chips in the United States. However, Taipei must first authorize the company’s proposal in order for the company to produce its most sophisticated chips abroad. In accordance with him, Taiwanese authorities will evaluate foreign investments in relation to economic and national security factors.

The minister stated that he is unable to predict the government’s course of action in the event that TSMC chooses to seek to implement its newest technology on US soil, a move that has been supported by U.S. authorities, including Secretary of Commerce Gina Raimondo.

The American government is optimistic that the Taiwanese chipmaker can help reintroduce advanced chip production to the country,

Despite the fact that TSMC has been grappling with labor issues.

According to Chen, the chipmaker is confronted with one of its most significant obstacles: the administration of its Arizona operation.

He declared, “They are becoming increasingly globalized.” “They must learn about management information, including how to oversee an overseas subsidiary, manage their activities and talents, and adhere to local laws and customs that differ from their own.”

Taiwan’s foremost commercial associate is no longer China, as Taiwanese enterprises are relocating their manufacturing operations to other countries. As a result of their close collaboration in the global supply chain, Chen characterized their partnership as “mutually beneficial.”

“We believe it’s beneficial to uphold stability as well as to have cooperative relationships and trade investment with the People’s Republic of China,” said the representative. “But we also need to become more resilient and diversify our market.”

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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