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.