There is "no chance" that building a wafer fab in one place will give it a technical advantage over other semiconductor manufacturing sites, Taiwan Semiconductor Manufacturing Co. (TSMC) CEO C.C. Wei (???) said Saturday amid concerns that Taiwan could gradually lose its competitive edge in the industry amid rising global competition.

Wei made the remarks during a speech on challenges facing the semiconductor industry at a forum held by Mount Jade Global Science and Technology Association in Taipei.

The possible "de-Taiwanization" of the semiconductor industry has been widely discussed after TSMC announced plans earlier this month to build a second fab in the U.S. state of Arizona equipped with advanced 3-nanometer processes in addition to its first fab for which it held a tool-in ceremony on Dec. 6.

The U.S. and Japan have tightened restrictions on the exports of advanced microchips and chip manufacturing equipment to China, which will pose challenges for China's semiconductor production, he said.

The situation will likely be exacerbated by local COVID-19 outbreaks in China, he said.

Geopolitics, the pandemic, and the war between Russia and Ukraine have all made semiconductors more crucial than ever, and every country wants to have the capability to make them, he said.

The easiest step in building an industry chain is to purchase machinery, but technology does not come with the construction of plants, he said.

After a manufacturer acquires the technology, it must then learn production, which is a skill that needs to be acquired, he said.

In addition, semiconductor design involves "brainwork," but in most countries, there is a shortage of engineers, he said.

All of the above-mentioned factors show that there is "no way" that any country could dominate the industry just by building fabs, he said.

TSMC has enjoyed moderate success thanks to its collaborative efforts with its subcontractors, he said.

"Money can build you production lines but won't take you much further than that," he said. "So does building a plant mean offshoring an entire industry? The answer is negative," he said.

Commenting on the current challenges facing the semiconductor industry, he said that the industry was no longer advancing as quickly at the pace defined by Moore's law, a phenomenon he attributed to the extreme costs involved in semiconductor production.

"One machine equipped with extreme ultraviolet lithography (EUV) costs 200 million euros, and one fab needs 20 to 30 of them," he said.

"Those who want to enter semiconductor production, be my guest," he said.

Responding to an audience member's question about his views on Japan's plan to form a "semiconductor alliance" to develop technology for manufacturing 2nm wafers, Wei said it was "not impossible for a business or a country to take shortcuts in semiconductor manufacturing, but it would be difficult."

"Does Japan have 3nm, 4nm or 5nm processes?" he asked.

"Sometimes speeding doesn't get you anywhere, it only gets your insurance company to pay," he said.

Asked what motivated TSMC to build a fab equipped with 22/28-nm processes in Japan, Wei said that it was because it has a client in Japan that happens to be a supplier of TSMC's largest client.

Customers' needs, not the needs of Washington or Tokyo, are always TSMC's main consideration when it decides whether to set up a fab, he said.

As such, the company must give its Japanese partner its full support to ensure that the production schedule of its largest client will not be affected, or else it could have repercussions for TSMC's 3nm fabs, he said.

TSMC's financial statements show that its biggest client, which is widely believed to be Apple Inc., contributed NT$405.4 billion, or 26 percent, of its revenue in 2021.

Asked to comment on Berkshire Hathaway Inc.'s recent revelation that it had acquired a large amount of TSMC's stocks, Wei said that the news had motivated him to increase his shares in the company as well.

Hopefully, it will have a positive effect on TSMC, he said.

The Warren Buffet-run Berkshire Hathaway Inc. reported to the U.S. Securities and Exchange Commission on Nov. 14 that it owned about 60.1 million TSMC American depository receipts (ADRs) valued at more than US$4.1 billion as of the end of the third quarter.

In the wake of the news, TSMC's share price on the Taiwan Stock Exchange (TWSE) soared by more than 7.8 percent on Nov. 15 as investors who admire Buffet followed him in purchasing the stock on the TWSE.

Source: Focus Taiwan News Channel