TSMC chief warns EU to learn from Japan on chipmaking

The CEO of the world’s largest chip foundry has warned the EU off investing public money in maintaining European production as local technology groups cut back their fab investments.

The EU's Framework Programme 7 recently commissioned research on "measures… to keep semiconductor manufacturing in Europe" and is due to receive the results late next year. But in his first public response, Morris Chang, chairman and CEO of Taiwan Semiconductor Manufacturing Company (TSMC), said that the EU should leave the decision to the market.

"I draw a parallel with Japan. It has also worried about maintaining a semiconductor manufacturing base for the last 20 or 30 years. But what have they gained from that? Nothing. In fact, you could say they lost," said Chang, in an exclusive interview with E&T.

He argued that Japan had surrendered market share by continuing to develop dedicated fabs thereby leaving the door open to more flexible fabless competitors from the USA. Companies such as Qualcomm in communications chips and Nvidia in graphics have grown rapidly in the last two decades by using third-party manufacturers like TSMC.

The future of European chip production has become a concern for some EU civil servants following the unravelling of the Crolles Alliance, which brought together most of the continent's leading semiconductor companies on the development of advanced manufacturing techniques.

Further information:

Read more from Paul Dempsey's meeting with Morris Chang in E&T vol 5, issue 16 (available online 20 October).

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