Why analysts believed TSMC was looking elsewhere
The China Post news staff Tuesday, March 21, 2017, 12:00 am TWN
TAIPEI, Taiwan -- Local media reports have pointed to several reasons why the world-leading chip maker may consider choosing the U.S. over Taiwan as the location for their new manufacturing site.
One variable may be Taiwan's water and electricity supply.
Electricity reserve margins dropped to under 6 percent last year, signaling electricity rationing may hit Taiwan. This year reserve capacities may fall even further — even to negative territories — making power rationing almost unavoidable.
In 2015, Morris Chang reportedly considered building Taiwan Semiconductor Manufacturing Company's (TSMC) own power plant to mitigate risks of a shortage, but the firm later quashed speculation, saying it would be very laborious and difficult. For years, TSMC has called for the Economic Ministry to offer an energy policy that addresses the power shortage fears of companies and investors.
Economic Minister Lee Chih-kung (李世光) promised to take
all possible measures to solve those issues, but added "it would be difficult if we can't build another power plant."
Skilled Labor Shortage
If TSMC decides to build the new plant outside of Taiwan, it's departure may also signal that a lack of skilled workers is taking its toll on the country's economy, said analysts. Taiwan is experiencing the double whammy of declining birth rates and a workforce drain, as an increasing number of young Taiwanese seek employment outside the island. A survey by the Science & Technology Policy Research and Information Center released earlier this month showed up to a third of PhD holders are willing to seek employment abroad, with less than ideal working environments and lower salaries cited as their main reasons.
Air Pollution Restrictions
Heavy industry centers Kaohsiung and Pingtung have an air pollution cap, which was launched to regulate emissions from factories in 2015. In a move to convince TSMC to keep its major investment in Taiwan, the government might take steps to ask other companies to reduce their emissions and offer a greater emission quota to the chipmaker.
Many companies have lashed out at the Taiwan government's Environmental Impact Assessment (EIA) process for being too long and costly. In response to a renewed wave of criticism after the recent TSMC rumor became public, the Economic Protection Agency said the process is "usually very fast" for competitive firms, adding it would not be difficult for a highly competitive company like TSMC to pass the assessment.
Taiwan Semiconductor Manufacturing Company (TSMC)
Founded in 1987
Headquartered in Hsinchu, Taiwan
Known for high-quality foundry work
Founded by chairman Morris Chang 30 years ago, Hsinchu-based TSMC is the first and largest contract semiconductor maker in the world. TSMC shipped more than 9 million wafers for 470 different customers in 2015, securing a 55 percent market share in the global semiconductor foundry industry that year. Employing a 45,000-strong workforce worldwide, the company operates nine fabs in Taiwan, one in the U.S. and a joint venture fab in Singapore.
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