TSM’s exec says Taiwan must improve chip tech to maintain leadership – report

Taiwan Semiconductor Manufacturing’s (NYSE:TSM) Senior Vice President Cliff Hou said that Taiwan should put in more resources to advance chip technology and boost its supply chain to maintain its leadership position worldwide, Bloomberg News reported.

“We should accelerate research and development to ensure our standing as an indispensable member of the global semiconductor supply chain,” said Hou in his role as chairman of the Taiwan Semiconductor Industry Association on Thursday, the report added.

The remarks also comes on the heels of Donald Trump defeating Vice President Kamala Harris and being set to return to the White House to be the country’s 47th president.

Hou added that they were also working with the government to see if they can attract foreign partners to set up design and materials centers in Taiwan.

Hou also said that Taiwan should intend to develop additional expertise in equipment and materials, areas which are dominated by foreign companies.

The close ties between Taiwan and the U.S. will not be affected by the election’s outcome, the Hou told reporters separately on the sidelines of the trade group’s event in Hsinchu, the report noted.

Taiwan and China have strained relations. While President Joe Biden has repeatedly shown unequivocal support for Taiwan, a few months ago, Trump had said that Taiwan should pay the U.S. for defending it.

Taiwan-based companies have increasingly become vital with the growing demand for chips used by companies to develop AI products. Besides TSM, a group of smaller suppliers has grabbed a majority share of orders for AI data center servers, power and cooling technology, the report added.

In an October podcast with Joe Rogan, Trump had suggested that he could use tariffs, not subsidies, to convince companies such as TSM to develop and expand chipmaking facilities in the U.S. Hou said to reporters on Thursday that Taiwan’s chip industry has not received any notification about new tariffs, according to the report.

Earlier today, it was reported that TSM and GlobalFoundries (GFS) had concluded discussions for billions of dollars in funding under the U.S. CHIPS Act and could be notified of the final awards soon.

Reportedly, Biden administration officials are rushing to finalize grants under the Chips Act after Trump recently criticized the CHIPS Act.

TSM has vowed to spend over $65B to establish three chipmaking plants in Arizona, which its top executives have said is subject to support from the government.

TSM intends to keep its most cutting-edge technology at home. On Thursday, Taiwan’s Minister of Economic Affairs J.W. Kuo told reporters that local laws do not permit TSM to transfer its most advanced technology overseas, the report noted.