TSMC draining itself with Arizona move

Morris Chang Chung-mou, founder of the Taiwan-based chip manufacturer TSMC, has said that they will build a wafer plant in Arizona to produce 3-nm precision chips. Local media outlets in Taiwan reported that engineers from the island are moving to Arizona.

That might be good news for Apple Inc, which has long wanted TSMC, the world's largest chipmaker, to set up shop in the United States to ensure a stable chip supply. Considering the high cost of labor in the US, and the fact that the US has long been ignoring its own manufacturing sector, TSMC setting up a branch in the US is a significant move.

It is good news for the US, definitely. The country has been lagging behind in the manufacturing sector for so long, and it needs a good factory. And TSMC's move echoes the US government's strategy of bringing back manufacturing industries, high-end ones in particular.

But for TSMC itself, it may not be a good move. Among all of TSMC's branches outside the island, the two on the Chinese mainland enjoy the best conditions, namely high-quality labor force, good infrastructure, high logistics speed and support from local governments. In some developed countries with similar conditions, the labor cost is much higher. A branch on the Chinese mainland makes good economic sense, yet TSMC has chosen otherwise.

TSMC's move is not good for Taiwan's economy either. Taiwan is not good with intricate technology, TSMC being one of the very few companies in that sector on the island. By setting up a unit in the US, Taiwan is moving high-end jobs away, thus depriving locals of opportunities. This could hurt their and their families' consumption, and, in turn, Taiwan's economy. They are playing with the lives of ordinary people just to flatter their boss, the US.

For any enterprise, to move 13,000 kilometers away is always a difficult decision. It is time TSMC reconsidered its decision, to avoid hurting the interests of the island and the people and businesses on the Chinese mainland.