TSMC Chairman Liu Deyin was invited to give a speech at the Taiwan Chamber of Commerce and Industry on November 22, sharing the topic "TSMC in the Artificial Intelligence (AI) Era". In his speech, when referring to the escalation of U.S. export controls on mainland China, he said that the U.S. expansion of the ban on Chinese chips will slow down global innovation, which is the biggest concern for the industry.

This speech is very in-depth and very interesting to interpret. The title is a bit sensational and sensational, but in fact Liu's speech did reveal a clear pessimistic mood.

Liu Deyin: "The expansion of the U.S. chip ban on mainland China will slow down the speed of global innovation. Not only will mainland China spend a lot of time making old things, but leading American companies will also slow down because they cannot see their opponents. , which is the biggest concern for the industry and economy."

Comment: The slowdown of leading U.S. companies (Nvidia, Intel, Apple, Qualcomm, etc.) means that the demand for advanced processes will decrease. TSMC’s profits are mainly in this area, and its leading point is also here, which means TSMC’s growth will be severely slowed down.

"If both China and the United States believe that they cannot live without TSMC, then our chips, TSMC, and Taiwan's flagship chip industry can play an important role in stabilizing the tense relationship between the two sides."

Comment: It shows that some people in mainland China and the United States now think that there is no need for TSMC, or that without TSMC, Sino-US relations may be better. The huge interests of the United States in TSMC will increase the possibility of a hot war between the two countries during the future reunification process across the Taiwan Strait. Therefore, there is no TSMC, or an overseas TSMC, which reduces the dependence of the United States and the world on Taiwan, which is very important to China and the United States.

"Amidst the divisive trend of globalization, the most important thing for Taiwan, China, now is to remain calm. We must maintain the world's confidence in Taiwan, China, and not cause global concern. This is the biggest challenge."

Comment: If the Democratic Progressive Party continues to come to power, it will inevitably cause global concern, but this is not something that TSMC can control. It can only run overseas as soon as possible.

"In response to the fragmentation of globalization, TSMC not only continues to deepen customer trust, but also responds to customers' needs for diversified supply chain risks, gradually expands global layout, manufactures in different regions, increases future growth, and pays more attention to attracting global talents."

Comment: In recent years, TSMC has extended its production lines to Arizona in the United States, Kumamoto in Japan, and Dresden in Germany, forming a global layout spanning Europe, Asia, and the United States. In addition to the United States and Germany, the Kumamoto plant in Japan will be officially opened in 2024. And it is considering building a third chip factory in Japan to produce advanced 3-nanometer chips, which may make Japan a major global chip manufacturing center.

"TSMC's factory construction in Arizona, USA, has been subject to twists and turns, and it has continued to solve problems. Currently, TSMC and the Union (trade union) have reached good communication. Sometimes people will laugh at me during the process. I don't care, as long as I learn from it. The experience learned is important to TSMC."

Comment: TSMC's U.S. factory construction has encountered a lot of trouble. It has been having a lot of trouble with the Arizona union, and the factory advancement has been blocked and is in trouble. But since it was my appointment, I had to finish it with tears in my eyes.

The digital economy is one of the ways to solve the global crisis in the future, including computers, software, communications, electronics, and of course the Internet, artificial intelligence, etc. Their common cornerstone is the semiconductor industry chain. Therefore, in order to strengthen the digital economy, it is necessary to develop independent and controllable core semiconductor technologies, which is also the core of high-quality economic transformation. The United States, the European Union, and China are all investing huge financial funds in semiconductors and rebuilding independent and controllable industrial chains.

Due to the geopolitical issues across the Taiwan Strait, the global semiconductor industry cycle has been distorted. Even in the two years before the industry's cyclical trough, a large amount of capital from various countries was spent on the semiconductor supply chain, especially in rebuilding new production capacity outside the Taiwan Strait. This has brought benefits to the localization of equipment and materials, but it has also brought serious overcapacity.

It is a common state of semiconductor construction in various countries to rush into redundant construction due to fear of the risk of war. However, once the factory is actually built in three to five years, if construction does not start, the global semiconductor industry capital will suffer from overcapacity. brought about a great depression in the industry. Isn’t this new news that TSMC will announce price cuts for its mature manufacturing processes next year.

So whether we fight or not, TSMC is already a crab on the chopping board and will face a dead end. The word I can think of is Dead Man Walking, which has the same name as the American movie.

In ancient times, Chong'er was born outside, and Shen Sheng died inside. It was his crime to cherish the treasure. Although TSMC was just a chess piece, it was too good and too important. The only way is to fill up the desire for survival, actively go out, and welcome the new era of large-scale production capacity dispersion. , is also a helpless choice.

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