12/07/2022

TSMC is not a Taiwanese company

 Superficially many think TSMC is a Taiwan company just like Alibaba is a Chinese company. Tsingtao Beer is also not a wholly owned Chinese company. Asahi Brewery is a major shareholder. The Chinese govt only owns about 30% of the Brewery. In the case of Alibaba, Jack Ma only owns 5% of the company, literally a minority shareholder. SoftBank owns at least 30% of Alibaba, the biggest shareholder. Alibaba is as good as a Japanese company.

What about TSMC, the pride of all Taiwanese? Taiwan's national treasure! The total Taiwanese ownership is about 20%. TSMC is mainly owned by American banks and associate companies, basically an American company. This speaks for why Morris Chang, the Taiwanese founder, has really very little say against its move to the USA. The Americans are plucking TSMC from Taiwanese soil, roots and all, and what can Taiwan do? Nothing. The pride of Taiwan, or the false pride of Taiwan, is returning to the USA. The Taiwanese chip industry is going to be hollowed out and many Taiwanese would be jobless. The Taiwanese economy would be affected and so were the supporting industries. Taiwan as the top chip manufacturer, the biggest chip foundry in the world, is history.

Howewer, the warning by Morris Chang is not empty noise. TSMC is profitable because of the cheap cost of production, cheap labour, efficient and discipline work ethics of Chinese workers and engineers from both sides of the Taiwan Strait. Transplanting TSMC into the barren and hot desert of Arizona would ensure its certain death.

The American labour and engineers are not like theTaiwanese and did not have the work ethics and discipline and conviction of the Taiwanese. Already the first few batches of engineers flown to the USA are feeling the discrimination and some have already packed up and return to China. Yes, there are Chinese engineers, plenty of them in TSMC. 

Why are they leaving the Big Apple, once the American dream and also a Chinese dream? Discrimination and being treated like second class citizens and second class workers are instantly prevalent. The Americans would not do shift, would not give up smoking in the workplace. Smoking was banned in Taiwan TSMC and in all chip foundries, but not in the new American TSMC.  Many of the Americans are less qualified and less experienced than the Taiwanese/Chinese engineers but are paid higher and even appointed as department heads of the Taiwanese/Chinese coming from Taiwan. Feeling cheated, discriminated and unfairly treated, the next option is to quit.

No way is the American TSMC, oops, should become ASMC, going to be able to compete against SMIC, Samsung or Japanese chips foundries. And there are Qualcomm, Nvidia, Intel, AMD, all with homeground advantage and govt subsidies to undercut the ASMC, and all waiting like sharks, ever ready to take over or buy over the ASMC.

TSMC/ASMC would not last a couple of years and be history. Morris Chang's baby would not grow up unless he has plans for China to adopt it and grow in China. It is unfair to think that Morris Chang would be so stupid to chop off the legs of his child, TSMC, to die in the hot and barren Arizona desert. He has little choice in this decision. 

But die it must be for TSMC/ASMC. It would become another American dinosaur like Texas Instrument and the likes. Whatever is left of TSMC would have to reorganise and reinvent itself into another independent foundry, a real and genuine Taiwan company that cannot be uprooted at the command of the Americans. It may be absorbed as part of SMIC, like those factories in China, and survive the execution by the Americans.

Taiwan would no longer hold the prestigious and enviable title of the biggest chip foundry in the world. The fairy tale is over. Taiwan would have to start to find a new niche for itself. Unfortunately, there is nothing in the horizon except selling more pineapples and local produces.

15 comments:

Anonymous said...

OMG, the whites Americuns gonna to die in desert of Arizona when TSMC shifted there, no more drinking bars, dancing , porky asses, playing pokers, hanging around, no night life like on Taiwan , no entertainment how r they gonna to do their wok. Wanna strike also quite remote , woah who wud wanna this dull job ..no fun rite ..all wok but no play makes Jackass a dumb boy ..yee ha.

Anonymous said...

The only thing of value in Taiwan is TSMC. Without TSMC, Taiwan is no longer indispensable to the Americans. The Americans know that Taiwan would return to China soon. Maybe Biden and Xi has reached an agreement during G20 and the Americans are now in a hurry to remove TSMC from Taiwan. The Americans already given up on Taiwan. Only interest is to sell more useless weapons to Taiwan for the Military Industrial Complex while they still can.

Anonymous said...

Buffett would not gamble with his money in FTX. He knows that TSMC would soon become ASMC.
But this may prove to be a bad investment for his fund as the ASMC would soon turn out to be a dud, overtaking by new technologies and development and without the big China market to sell to.

Anonymous said...

Right Anon 10.00. USA interest in Taiwan is all about TSMC. When TSMC uproots it's main production hub to USA, Taiwan will become a sinkable aircraft carrier, not what they gloatingly touted as unsinkable. I believe many Taiwanese realised this, that is why the DPP lost so badly in the election just concluded.

Honestly, for most voters in Taiwan, TSMC is not important to them directly, as many Taiwanese are farmers that depended on the mainland to sustain their agricultural business. Tourism from mainland China is also an important source of job generation for many Taiwanese. Without the mainland providing the demand for agricultural products and providing the numbers in tourism, Taiwan is going to be suffocated for sure.

Anyway, of what use is TSMC, Samsung or other Japanese chip manufacturers moving to USA when they are going to lose the Chinese market eventually? Pushing China relentlessly to become self sufficient, or at least in the manufacture of mature chips for cars and household consumer goods is not a good idea as China is already capable of providing the alternative. High end chips may take time, but the Chinese will overcome this eventually, just like space exploration, rocketry, jet engines, super computers, artificial intelligence, infrastructures and honing their skills in competition against the best in the world. The Chinese will take on challenges fairly and squarely and not using underhand tactics to sabotage competitors in order to rise to the top. That is how China became better in many fields.

The subsidies that the Biden administration has announced for the chip manufacturing industry in the USA is just pulling wool over unsuspecting eyes, and is mainly for aiding their own domestic manufacturers like Qualcom, Intel and Nvidia, not really to help TSMC or Samsung.

TSMC and Samsung are just being forced to relocate to the USA to lure their own talents from Taiwan and South Korea to help in the development of the chip manufacturing expertise when they move to the USA, an area which the USA lacks resulting from the exodus of mainland Chinese scientist and engineers from the USA recently. They even have to talk about changing citizenship laws for talents outside the USA to return or lose their citizenship. This is rather draconian. This is a fact that not many people are aware of, but those talents working outside the USA are greatly perturbed.

Anonymous said...

By the time Taiwan finds a new niche, China would have covered all the angles in every conceivable ventures. Ya, Taiwan can concentrate on pineapples, fruits and vegetables. But they still need a big market.

Anonymous said...

To the Taiwanese,

Do you want a good life, plenty of opportunities as citizens of the number one super power with the biggest consumer market in the world, and walking around with your heads held high?

Or, do you want to be a small dysfunctional island, everyday hoping for someone to help you, beholden to the Americans that can kick you left and right as a pariah people, and an island economy that can shrink and not expand, without access to the biggest market in the world?

Choose between the good life and the life of a pariah pretending all is fine.

Anonymous said...

Good for Taiwan to let Tsmc go. Taiwanese are the minorities and most of them are the very rich peoples. TMSC were one of the largest consumer of water and energy. Its also are among the top polluters. Without TSMC, Taiwan would have no shortage of electricity and water. Environmentally would be cleaner.

patriot said...


TSMC
shall be viable for many years to come, if lndia is rope in. And this shall be what the US will do.
India population is expected to surpass China very soon. It is a large country that many of its' inhabitants are under-employ as well as materially poorly equiped. As such it is a huge markets for worker and consumer. It is also developing and progressing well.
Thr Greatest Loser of TSMC migration shall be the Taiwan People and Taiwan Province.
TSMC Chip may get supercede by Chinas'
Manufacturers as in other fields like
Space Exploration Rail System, Bridge Building and Other Scientific
Development in Medicine etc.

China is the Largest Market for most Taiwan products and any curbs impose on them means the Producers shall suffer.
Mainland visitors to the Taiwan Province is just as crucial to
the People in Taiwan as it is a major source of incomes to many in the lsland.

The Taiwan People know that under Tsai lngwen, they will suffer not only in livelihood, they may even face the
Worst of having to go to war and get killed for no good reaon.
Think the Taiwan People will depose Tsai lngwen and the DPP.





AdikHaron said...

Jack likes politics. He should come to malaysia to buy land which is cheaper by 3 to 4 times than Sg.. Build his empire by involved with Anwar or Moo. Whom ever he bets.

Chua Chin Leng aka redbean said...

Malaysia was Jack Ma's number one choice for his head office. Think something went wrong and he relocated to Singapore. Malaysian government policies are too volatile and change everyday and with every change of government. Businesses would think twice sinking big investments and money there. It has to rebuild its reputation as a reliable and predictable government to draw in the investments. So far only China dares to risk investing in Malaysia but still got burnt many times with billion dollar projects switching on and off and losing a lot of money.

The Forest City project is now as good as kaput with so many changes of rules and regulations. The biggest port in Malacca to bypass Singapore is also hanging on a string. Singapore is hoping that the string would snap.

Malaysia must get its act right. Anwar may be able to do it but his government may not last long given the kampong boy politicians wanting to bring him down. So it is still a work in progress despite all the cost advantages you mentioned. Malaysia could be a very rich and prosperous country with a lot of foreign investments. Looks like Indonesia is now a safer bet with the last few presidents taking a rational and pragmatic approach towards business and economics.

Anonymous said...

Malaysia's role in China's plan to bypass Singapore would become irrelevant once the Thais agree to cut the Kra Canal. At the moment the asking price by the Thais is too high and China is not willing to pay. Once the price is right, the Kra Isthmus would be cut and China can give up the Malacca Port.

Anonymous said...

It is all economics...and politics.

old investor said...

Morris chang and his family are american citizens, he has to do his national duty

Anonymous said...

Pelosi went to Taiwan with an edict. TSMC must go back to the US. There is no other way out.

Anonymous said...

The Taiwanese are training the Americans who would become their bosses.

Just like Singaporeans training foreigners here,who later became their bosses and also sacked them and turned them into taxi drivers and security guards.

When the Americans become their bosses, they would also sack the Taiwanese.