Taiwan Semiconductor Manufacturing Company (TSMC), a major supplier for companies like Nvidia and Apple, announced that it had engaged in discussions with certain clients regarding relocating its chip production facilities away from the island due to escalating tensions with China. However, TSMC's chairman, C.C. Wei, stated that it would be infeasible to move the chip factories as 80-90% of TSMC's production capacity is situated in Taiwan.
The heightened tensions between China and Taiwan, sparked by China's military exercises around the island following the inauguration of Taiwan's President Lai Ching-te, have raised concerns about supply chain stability. However, Wei emphasized that while instability across the Taiwan Straits is a factor, TSMC does not desire war and firmly stated that moving the chip factories off the island is not an option.
Although Wei did not disclose the identities of the customers with whom TSMC had discussions about relocating chip production, it was mentioned that TSMC had conversations with OpenAI, the creator of ChatGPT, regarding AI chip supplies. Wei described the proposed plans as "too aggressive".
OpenAI's CEO, Sam Altman, previously held talks with TSMC to discuss a potential partnership to build numerous factories, but TSMC expressed concerns about operating an excessive number of fabs at the required capacity and doubted the forecasted demand for over 30 new fabs at the time.
At present, the industry appears to be relatively unworried about potential war-related impacts on chip supply chains, as suggested by the minimal focus on this topic at the annual Computex technology trade show in Taipei. Frank Huang, chairman of Powerchip Semiconductor Manufacturing, indicated that there is a lack of concern among industry representatives at present.
