TSMC Weighed Leaving Taiwan Amid China Tensions, Deemed Move Infeasible

TSMC disclosed it had considered relocating its chip factories from Taiwan amid escalating China tensions but decided the move was impractical.

TSMC's Relocation Discussions

Tensions between Taiwan and China have been rising, and contract chipmaker TSMC announced on Tuesday that it had discussed the possibility of relocating its chip factories off the island with specific clientele. However, as reported by Reuters, the company ultimately decided that this would not be feasible.

"Instability across the Taiwan Straits is indeed a consideration for supply chain, but I want to say that we certainly do not want wars to happen," C.C. Wei, chairman of Taiwan Semiconductor Manufacturing Co (TSMC), told reporters following the organization's annual general meeting.

China's War Exercises Raise Concerns

Since Beijing began war exercises around the democratically governed island of Taiwan a month after the inauguration of President Lai Ching-te, whom Beijing denounces as a "separatist," tensions between China and Taiwan have gotten worse significantly.

According to Wei, semiconductor manufacturing cannot be relocated from Taiwan because 80-90% of their production capacity is located there. Wei remained mum on which clients TSMC had discussed leaving Taiwan with.

Yahoo Finance shares that even if tensions are high between the US and China, during this year's Computex technology trade expo in Taipei, the subject of a potential conflict and its effects on chip supply chains has been almost entirely absent.

Frank Huang, chairman of Powerchip Semiconductor Manufacturing, told reporters at the event that "nobody is worried about this yet" in response to a question about whether or not international clients were pressuring Taiwanese enterprises to stop producing there over the current tensions.

AMD's Support for Taiwan

When questioned about the potential impact of China's war exercises and the ensuing tensions on the industry, AMD CEO Lisa Su confidently reaffirmed Taiwan's unwavering significance in the worldwide chip supply chain.

"We do a lot of our manufacturing here with key suppliers like TSMC... And then we also have a number of partners that help us build out the ecosystem here in Taiwan," she disclosed to reporters at the event on Monday.

Photo: 李 季霖/Flickr(CC BY-SA 4.0 DEED)