The world’s leading chip maker plans global expansion with plants in Europe, Japan | CNN Business

New Delhi
CNN
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Semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) may further expand its global manufacturing footprint.

The company is considering opening its first plant in Europe and a second in Japan, CEO CC Wei said on an earnings call Thursday.

TSMC, which produces about 90% of the world’s super-advanced chips, has already increased its investment in the United States. The company announced last year that it was building a second semiconductor factory in Arizona and will increase its investment there from $12 billion to $40 billion.

Speaking about TSMC’s new plans on Thursday, Wei said that in Europe “we are engaging with customers and partners to assess the possibility of building a specialized factory, focused on automotive-specific technologies, based on customer demand and the level of government support.”

A factory refers to a semiconductor manufacturing plant.

The company is also considering building a second factory in Japan, “provided customer demand and the level of government support makes sense,” he said.

These plans come amid falling demand for semiconductors due to a weakening of the global economy.

“In the first half of 2023, we expect our revenue to decline [by] Mid-high single-digit percentage over the same period last year in US dollar terms,” Wei said, adding that he expects revenue to pick up in the second half of the year.

“For the full year 2023, we forecast the semiconductor market, excluding memory, to decline by approximately 4%,” he added.

TSMC is considered a national treasure in Taiwan and supplies tech giants like Apple and Qualcomm. It mass-produces the world’s most advanced semiconductors, components that are vital to the smooth operation of everything from smartphones to washing machines.

The company is perceived to be so valuable to the global economy, as well as to China, which claims Taiwan as its own territory despite never having controlled it, that it is sometimes even referred to as part of a “silicon shield” against a potential military invasion by Beijing.

According to analysts, the presence of TSMC gives the West a strong incentive to defend Taiwan against any attempt by China to take it by force.

The company’s international expansion has caused great unrest in Taiwan.

Apart from the risk of TSMC taking away its most advanced technology, stripping Taiwan of one of its unique assets and reducing local employment opportunities, there are fears that a reduced presence of the company could expose Taipei, the capital of Taiwan, to greater pressure from Beijing.