What is in this article?:
- TSMC's New $3 Billion Plant in China Isn't for Chinese Clients
- Closer to Customers?
TSMC gets 69% of its revenue from North America via the industry's biggest names, including Apple, Qualcomm, Broadcom, and even Intel.
Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman Morris Chang is many things. He's an MIT alumnus, and a Stanford PhD graduate. He's a man known for choosing his words, to which the semiconductor industry listens. As the founder of the world's biggest outsource chip manufacturer, Chang has instilled in the Taiwanese company a U.S.-like paranoia for intellectual property protection and technological secrecy.
What Chang is not, is brash or foolhardy.
So when TMSC this week signed an investment agreement with a municipal government in China -- a country notorious for IP leakage and lax enforcement of trade secrets -- you can be sure Chang didn't make the decision lightly.
At its site in Nanjing, which it expects to open by the end of 2018, TSMC will make chips using one of its most advanced production technologies. That technology, at a manufacturing scale of 16 nanometers (smaller is better), is the same as the Taiwanese company uses today in making Apple's chips for iPhones and iPads.
Admittedly, the technology will no longer be cutting edge by the time it's in use at TSMC's shiny new $3 billion factory. So why then did TSMC decide to set up shop in a country where rivals have tried, and succeeded, in stealing its secrets?
"We aim to provide closer support to customers as well as expand our business opportunities in China in step with the rapid growth of the Chinese semiconductor market over the last several years," TSMC said in a statement on March 28.
That China's chip industry is growing is a truism. Consumption of semiconductors in the world's largest PC and smartphone market continues, while the country's ability to manufacture those chips has been unable to keep pace.