TSMC urges Taiwan to make more chip gear and materials at home

(March 30): The chairman of Taiwan Semiconductor Manufacturing Co (TSMC) called on the island to produce more of the equipment essential to advanced chipmaking, shoring up its already critical role in the US$550 billion (RM2.43 trillion) industry.

Taiwan needs to build a fuller domestic semiconductor supply ecosystem, Mark Liu said. US sanctions are curtailing the flow of vital technology to China, and Taiwan could play a bigger role in supplying the machines needed to make chips worldwide, he told a conference organised by the Taiwan Semiconductor Industry Association on Thursday (March 30).

Governments from Japan to the US have courted Hsinchu-based TSMC, keen to get the world’s most advanced chipmaker to set up cutting-edge production within their borders. Now, Taiwan itself needs to secure its supply chain, Liu said in his capacity as the chairman of the association, a post he’s ceding to another TSMC executive.

The Taiwanese chip industry is asking the government to offer more tax incentives for foreign equipment makers to set up shop locally, Liu added.

The self-governing island is known for having the most advanced chip manufacturing technology, and TSMC is its most valuable public company. Still, Taiwan must invest more in basic science and cutting-edge research to maintain competitiveness, Liu said. It should build domestic capabilities for critical upstream technologies in order to produce the equipment and materials required to stay ahead in the chip race.

US firms Applied Materials Inc, KLA Corp and Lam Research Corp are among the leading suppliers of chipmaking gear, which may be affected by any move to localise production of their products within Taiwan.