Yole CEO: TSMC builds a leading-edge fab in Europe? It’s ‘Nonsense’

By Junko Yoshida for the Ojo & Yoshida Report – China’s Communist Party clearly isn’t giving up on its long-term goal to absorb Taiwan into China. When, if ever, Beijing might pull the trigger is anybody’s guess. Taiwanese companies tend to downplay the possibility, but those reassurances haven’t assuaged the world’s fear that it might happen.

What’s at stake?

China’s Communist Party clearly isn’t giving up on its long-term goal to absorb Taiwan into China. When, if ever, Beijing might pull the trigger is anybody’s guess. Taiwanese companies tend to downplay the possibility, but those reassurances haven’t assuaged the world’s fear that it might happen. In no small part, that’s because Taiwan Semiconductor Manufacturing Co.’s success in chip production has made Taiwan economically and politically critical to the whole world.    

So, why is TSMC pursuing its geographical expansion plan now? Is this decision driven by politics or commerce? How big is the political element? As they lay TSMC’s profitability and technology preeminence on the line, how will its leaders manage overseas expansion?

We caught up with Jean-Christophe Eloy, CEO of Yole Développement, and Emilie Jolivet, the firm’s director of semiconductor, memory, and computing, to ask why TSMC is pursuing global fab expansion now. Yole doesn’t think TSMC is likely to invest in a leading-edge node fab in Europe. Nonetheless, TSMC has good reason to expand its fab footprint abroad.

Highlights of our conversation are excerpted here.

Jean-Christophe Eloy: Before answering your questions, let me lay out three changes TSMC is facing today.

First, TSMC is no longer just a manufacturer/supplier of advanced semiconductors. It has become a company strategically important to the world. Without TSMC, there would be fewer smartphones, fewer cars, fewer anything.

Second is the changing relationship between China and the United States. Taiwan is now caught in the middle.

Third, new competitors are emerging. Foxconn’s decision, announced in early August, to buy a fab from Taiwan chipmaker Macronix International is a good example. Foxconn is acquiring the front-end fab to manufacture silicon carbide (SiC) devices for EVs.

Full interview

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