If humanity’s priorities were measured in terms of construction costs, they would be categorized as awe of God, the future of physics, and the making of computer chips.
The building complex around the Great Mosque of Mecca is considered the most expensive construction modern times, although the cost of the international thermonuclear experimental reactor in France may exceed it once completed.
But the third most expensive building is almost certainly the huge semiconductor factory is being built by TSMC in Taiwan for approximately $ 20 billion. When the facility goes into operation next year, it will contain clean rooms the size of 22 soccer fields, in which silicon chips will be produced in dimensions that redefine the meaning of wafer-thin. At just 3 nanometers, TSMC’s wafers are as thick as their length Fingernail grows in three seconds.
These huge investments underscore the almost insatiable demand for computer chips, the dominance of Taiwanese chipmakers, and the sophistication of modern manufacturing. TSMC’s chips power everything from the latest Apple iPhones to medical devices F-35 fighter aircraft, Accounting for about 55 percent of global semiconductor sales.
But the manufacture of semiconductors is also becoming a geopolitical imperative. As part of pressure on China’s technology industry, the US has put pressure on TSMC to stop supplying Huawei, one of its largest customers. China, which spends more on importing computer chips than on oildevelops a semiconductor industry to reduce reliance on overseas suppliers.
The US, Japan and The EU is also stepping up its efforts to develop domestic semiconductor industries as their automakers and computer game companies complain about the lack of supplies. Computer chips are currently competing with vaccines as indispensable resources for any nation-state.
If military capabilities in the past centuries have been based on breech loading rifles, warships, or atomic bombs, in the 21st century it might depend on the smartest use of advanced chips. The central importance of TSMC to the global semiconductor industry is sometimes given as a reason why mainland China might still invade Taiwan. But far greater military and political considerations will determine Beijing’s course of action.
In every way, TSMC is an exceptional company taking advantage of overinvestment from its competitors. It just announced that Investments will continue to increase between $ 25 billion and $ 28 billion this year as it’s difficult to grow capacity fast enough to meet demand. During one Profit call in the last monthCC Wei, CEO of TSMC, said the rising sales of smartphones and high-performance computers, as well as the adoption of 5G mobile technology, are fueling demand for the top of the company Logic chips. “We believe 5G is a multi-year megatrend that enables a world where digital computing is increasingly ubiquitous,” he said.
Most other semiconductor companies have the race to make 3nm chips because of the stratospheric costs. With its huge investments, technological expertise, supplier network and support from the Taiwanese government, it will now be difficult for any rival to catch up with TSMC. Only Samsung from South Korea is visible in the rearview mirror.
“What sets TSMC apart from other foundries is its risk tolerance and ability to execute. It’s an incredible business model, ”said Brett Simpson, tech analyst at Arete, an independent research firm. “The market is heading for a dominant player and a subscale player who are hanging out there and doing very well.”
The bigger concern for TSMC is geopolitical tension between the US and China. With two production facilities in China, one in the US state Washington and another planned in ArizonaTSMC has hedged its bets. But like many other companies in a rapidly polarizing world, it is forced to choose.
Shelley Rigger, professor at Davidson College in North Carolina and author of Why Taiwan matterssays US pressure on China only reinforces Beijing’s determination to become self-sufficient in semiconductor manufacturing: “China has an infinite amount of money to tackle a problem like this and no qualms about what needs to be done.”
Taiwan has long feared that the world could be divided into China-dominated red supply chains US-focused blue supply chainsEndangering relations with its largest trading partner or its most important strategic ally. The island’s room for maneuver becomes as thin as TSMC’s wafers.