Intel and TSMC CEO’s needle each other over US based chipmaking

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The world of chipmaking is very complex. It’s clear that pressure is building on everyone, including gamers, from big tech CEOs to politicians hoping to grab affordable GPUs. Discussions of billion-dollar contracts are usually kept in-house, but this has left Intel CEO Pat Gelsinger and TSMC chairman Mark Liu engaging in a rare public brawl over petty things like geopolitical instability and national security. Has not stopped.

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First, a bit of background. US lawmakers are working on passing legislation known as Chips for America Act and FABS Act, These bills are intended to shore up USA-based semiconductor R&D and manufacturing. The discussions have pointed to national security as a primary concern. The US Senate passed funding for the CHIPS Act in June 2021, but discussions in the House of Representatives have stalled since then. Many other CEOs from Apple, Intel, Nvidia and AMD have signed an open letter Addressing Congress prompted it to pass the law. These calls to action will only intensify.

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as reported by bloomberg And this Taipei TimesLast week, Intel CEO Pat Gelsinger, speaking at the Fortune Brainstorm Tech Summit in California, said the US government must support a sustainable semiconductor supply chain in the US, because “Taiwan is not a stable place.” No doubt the comment raised some eyebrows among the attendees.

He has a point. China continues to increase its power across the region. It regularly sends military aircraft into Taiwan’s airspace and there are concerns that further disruption to global semiconductor supply issues could be disastrous for the fragile global economy, not to mention Intel’s bottom line. Additionally, as someone who has experienced the Taiwan earthquake, I often wonder how safe the fab facilities really are!

TSMC president, Mark Liu, delivered a rare public rebuke. Asked about Gellinger’s comments, Liu said: “It’s nothing that needs to be addressed.” Before following up “many people won’t believe what Intel says.” Such a comment aimed at a customer would be unusual, but it is even more so coming from a business leader in Taiwan, where the business culture is strongly based on respect.

For its part, TSMC is building a $12 billion facility in Arizona, with the aim of starting volume production of 5nm chips in 2024. This fab will be joined by Samsung’s $17 billion facility in Texas, to make it clear that investment in USA-based manufacturing is increasing.

A 300-millimeter silicon wafer in the clean rooms of the GlobalFoundries Fabrication (FAB) plant in Dresden, Germany, on Thursday, February 11, 2021.

(Image credit: Lisa Johansen-Kopitz/Bloomberg via Getty Images)

But, the problems will not be completely solved, whether they are made in the USA or Taiwan or China. A typical chip contains chemicals and rare earth metals sourced from around the world, a shortage of any of them can dramatically affect production. A chip can be dispersed in Taiwan before being assembled elsewhere with a substrate made in China or a PCB in Malaysia. Add in shipping delays, tariffs and protectionism and the hefty spending of semiconductor manufacturing and it becomes clear that the game’s major players will have a lot to say on these issues in the months, weeks and years to come. Companies like Intel and TSMC are starting to feel the pressure. Now, where are those affordable GPUs?

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