Introduction:
In a rapidly evolving technological landscape, the global semiconductor industry has become a focal point in the escalating technological war between the United States and China with sanctions and counter-sanctions.
TSMC Chairman Dr. Mark Liu recently delivered a thought-provoking speech titled “TSMC under AI,” shedding light on the challenges and opportunities that lie ahead.
This blog post explores the key insights from Dr. Liu’s speech, touching upon the impact of AI sanctions, the importance of national security, and the role of Taiwan Semiconductor Manufacturing Company (TSMC) in fostering global innovation.
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The AI Sanctions Conundrum:
Dr. Liu’s cautionary words about the potential ramifications of “AI Sanctions” reflect the deepening anti-globalization efforts between the United States and China. The semiconductor industry, a cornerstone for AI capabilities and applications, finds itself at the center of this geopolitical storm.
The expansion of the U.S. chip ban on China, as highlighted by Dr. Liu , raises concerns about the slowing pace of global innovation. This not only affects mainland China but also casts shadows over leading U.S. companies, impeding their progress in the absence of formidable competitors.
Semiconductor technology serves as a pivotal catalyst for advancing new AI capabilities and applications, with Taiwan solidifying its strong standing in this dynamic industry amid a tumultuous global landscape.
Nevertheless, Dr. Liu underscores the growing intensity of technological competition, underscoring concerns about the broader ramifications of the expanded U.S. chip ban targeting China.
This geopolitical move is anticipated to act as a brake on the pace of global innovation. The repercussions are twofold: while mainland China may face challenges in keeping up, leading U.S. companies could experience a deceleration due to a lack of visible adversaries. Ultimately, this subtle apprehension looms as the foremost worry for both the semiconductor industry and the global economy.
TSMC CEO, Chairman and Founder: C. C. Wei, Mark Liu and Morris Chang
Read More: TSMC Continues to beat Intel & Samsung to Dominate Chip Revenue
What are AI sanctions on China ?
AI sanctions on China by the USA are a set of export controls and investment restrictions that have been implemented by the US government in recent years to restrict China’s access to advanced artificial intelligence (AI) technologies. The stated purpose of these sanctions is to prevent China from developing AI capabilities that could pose a threat to US national security.
The sanctions target a wide range of AI technologies, including AI chips, software, and algorithms. They also restrict US companies from investing in Chinese AI companies and from collaborating with Chinese researchers on AI projects.
The sanctions have affected a wide range of companies, including:
- AI chipmakers: Nvidia, Intel, AMD
- AI software companies: Google, Microsoft, Amazon
- AI research institutions: Stanford University, Carnegie Mellon University, Massachusetts Institute of Technology
The sanctions have also affected Chinese AI companies, including:
- AI chipmakers: Huawei, Alibaba, Baidu
- AI software companies: SenseTime, Megvii, CloudWalk
- AI research institutions: Chinese Academy of Sciences, Tsinghua University, Peking University
Read More: What are the Key Regulatory Changes by US in the Expanded Ban to China?
Globalization is not dead, but divided
Amidst the changing international landscape, Dr. Liu emphasizes a nuanced perspective, choosing not to declare “globalization is dead” but instead acknowledging its “divided” nature.
Within this divisive trend, there arises an increasing emphasis on national security. For Taiwan, the paramount challenge lies in maintaining composure, assuring global confidence in the nation without sparking widespread concern.
In the context of TSMC, amidst the ongoing trend of globalization fragmentation, the company has observed a heightened focus from its customers on diversifying manufacturing across various regions.
In response, TSMC has strategically expanded its global footprint, aligning with customer needs. This approach not only fosters greater trust with customers but also positions TSMC for future growth. Additionally, it serves as a means to attract talent from diverse corners of the world.
Dr. Liu underscores TSMC’s commitment to staying ahead in the face of technological competition.
He highlights the company’s proactive approach to globalization, aligning with customer requirements and expanding its global presence. This not only builds customer trust but also positions TSMC for future growth while attracting talent from around the world.
Remaining calm and instilling confidence in Taiwan is considered essential to overcome the challenges posed by the evolving international situation.
Read More: 5 Major Updates on TSMC Global Expansion Plan
Semiconductor Market Dynamics:
According to Dr. Liu, within top 20 semiconductor companies globally in 2022, there exists a Fabless company that operates without a wafer factory.
Projections suggest that Nvidia s poised to claim the title of the world’s largest semiconductor company in 2023. This showcases the rapid progress of Fabless entities. In the next 5 years, system companies are poised to grow at a rate of 17%, while Fabless companies are expected to achieve a growth of around 10%.
This contrasts with the comparatively slower projected growth rate of 4% for IDM (semiconductor integrated component manufacturer) companies.
Furthermore, advancements in semiconductor technology continue to play a pivotal role in shaping the industry landscape.
TSMC’s Unique Role in Open Innovation:
Distinguishing TSMC from other semiconductor companies, Dr. Liu emphasizes its role as a facilitator of global innovation.
Unlike competitors whose products are exclusively applied in-house, TSMC opens its technology for global application.
“This is the purpose of TSMC, to release the energy of innovation.”
~Dr. Mark Liu, Chairman, TSMC
The company’s purpose, as outlined by Dr. Liu, is to “release the energy of innovation.” TSMC positions itself as a technology provider and ecosystem builder, fostering an open innovation platform where collaboration, not competition, is the driving force.
Conclusion:
As the technological war intensifies and geopolitical uncertainties rise, Dr. Liu’s insights offer a glimpse into the challenges and opportunities facing the semiconductor industry. TSMC, with its global outlook and commitment to open innovation, stands poised to navigate the complexities of the evolving international landscape.