Inside Taiwanese chip giant, a U.S. expansion stokes tensions

By John Liu, Paul Mozur | New York Times

John Liu and Paul Mozur, who are based in Seoul, interviewed dozens of semiconductor experts on the geopolitics of Taiwan’s chip making.

Taiwan Semiconductor Manufacturing Company, the world’s biggest maker of advanced computer chips, is upgrading and expanding a new factory in Arizonathat promises to help move the United States toward a more self-reliant technological future.

But to some at the company, the $40 billion project is something else: a bad business decision.
Internal doubts are mounting at the Taiwanese chip maker over its U.S. factory, according to interviews with 11 TSMC employees, who declined to be identified because they were not authorized to speak publicly. Many of the workers said the project could distract from the research and development focus that had long helped TSMC outmaneuver rivals. Some added that they were hesitant to move to the United States because of potential culture clashes.

Their concerns underline TSMC’s tricky position. As the biggest maker of chips that power everything from phones to cars to missiles, the company is strategically important with highly coveted technical know-how. But caught in a deepening battle between the United States and China over technological leadership, TSMC has tried to hedge its bets — only to find that its actions are creating new kinds of tensions.

Its factory expansion in the northern outskirts of Phoenix is meant to bring advanced microchip production closer to the United States and away from any potential standoff with China. Yet the effort has stoked internal apprehension, with high costs and managerial challenges showing how difficult it is to transplant one of the most complicated manufacturing processes known to man halfway across the world.

The pressure for the Arizona factory to succeed is immense. Failure would mean a setback for U.S. efforts to cultivate the advanced chip manufacturing that mostly moved to Asia decades ago. And TSMC would have spent billions on a plant that did not produce enough viable chips to make it worth the effort.

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