World’s top chip maker mulls global expansion with plants in Europe, Japan | CNN Business


New Delhi

Semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) may expand its global manufacturing footprint even further.

The company is considering opening its first plant in Europe and a second one in Japan, its CEO CC Wei said in an earnings call on Thursday.

TSMC, which produces an estimated 90% of the world’s super-advanced chips, has already upped its investment in the United States. The company announced last year that it’s building a second semiconductor factory in Arizona and raising its investment there from $12 billion to $40 billion.

Speaking about TSMC’s new plans on Thursday, Wei said that in Europe “we’re engaging with customers and partners to evaluate the possibility of building a specialty fab, focusing on automotive-specific technologies, based on the demand from customers and level of government support.”

A fab refers to a semiconductor fabrication plant.

The company is also considering building a second fab in Japan, “as long as the demand from customers and the level of government support makes sense,” he said.

These plans come amidst falling demand for semiconductors because of a weakening global economy.

“In the first half of 2023, we expect our revenue to decline [by] mid- to high single-digit percent over the same period last year in US dollar terms,” Wei said, adding that he expects revenue to increase in the second half of the year.

“For the full year of 2023, we forecast the semiconductor market, excluding memory, to decline approximately 4%,” he added.

TSMC is considered a national treasure in Taiwan and supplies tech giants including Apple and Qualcomm. It mass produces the most advanced semiconductors in the world, components that are vital to the smooth running of everything from smartphones to washing machines.

The company is perceived as being so valuable to the global economy, as well as to China — which claims Taiwan as its own territory despite having never controlled it — that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing.

TSMC’s presence gives a strong incentive to the West to defend Taiwan against any attempt by China to take it by force, analysts say.

The company’s international expansion has caused deep unease in Taiwan.

Apart from the risk that TSMC will take its most advanced technology with it — stripping Taiwan of one of its unique assets and reducing employment opportunities locally — there are fears that a diminished presence for the company could expose Taipei, Taiwan’s capital, to greater pressure from Beijing.

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