Semiconductors and Geo-technology: ‘Know-how’ is Power

Welcome to our special edition of the Cyber policy Center seminars winter series normally we have it on Tuesday but today we have Wednesday but we have it on Wednesday but still we got a pretty good turnout so I'm very happy about that today we're going to have Dr Chung Yi Lee uh and I'm going to very quickly introduce her and then what she's going to talk about oh of course myself I'm Charles Mark a visiting fellow which visiting scholar at the uh Global digital policy incubator at the Cyber policy Center so Dr chungi Lee is the associate professor in the school of politics and international relationship and director of the Taiwan studies program at the University of Nottingham in the UK her first book was a Taiwanese business or Chinese security asset that was published by uh Rutledge in 2011 and she's currently working on her second book very likely on the topic that we're talking about today semiconductors and geopolitan geopolitics so her topic today is going to be on semiconductors and geotechnology know-how its power you know we've been talking about a lot these recent years recent months about chip and the semiconductor supply chain issues geopolitics and so on so I hope that I'm sure that Chung Yi is going to be able to put it all in content context for us today and I think the know-how is the word that she needs to explain to us what is going to be about you know what it took for Taiwan to got to where it got where it is right now and not only that I think the burning question is whether or not other countries in particular China or even the US will be able to get to know how and that is probably what Changi is going to be able to tell us about so without further Ado I turn the time over to and the podium over to chungi Dr D please thank you well thank you so much um Charles for the organizational work and thank you for the cyber cyber policy institutes to host this seminar um I felt pretty much of thrilled that I would be able to present my ongoing work as Charles indicated Lisa's book projects that I'm trying to work on since last year and continuously will be through this year and as you know academic like me writing really slowly till next year so um what I wanted to present and share with you today is part of the book proposal or book projects that I've been working on and that particularly focused on the part of Taiwan but the geotechnology park which is complex it and it is a lot of the different puzzles that we would like to put together that would be very much I would like to discuss with you at the QA and Beyond so what I am working to understand better is to introduce you first the importance of taiwan's high-tech high-tech sector why that is important to Taiwan and learn how Taiwan sort of incubated the high-tech sector not only just now actually since 1960s 70s to start with and to most of you probably this is a very uh simple questions to say what are the semiconductors but I just give you a little bit of the context while that is important because in a country where I come from the UK not many people understand what is semiconductor and what if that doesn't work or the disruption of the supply chain what happened so um that is the second part I learned again I would talk a little bit about the global supply chain and let's enter to this discussion whether that's possible to have the decoupling or whether that is you know to see that kind of the Rivalry enter to the new Cold War and then I would also took a little bit of time to talk about and to answer what Charles was mentioning about at the beginning what is know-how and why Taiwan again in my observation is good at producing these high quality semiconductors and uh well I would like to end this very premature presentation and short presentation with open question which is whether the semiconductor will be shared over Taiwan as you would understand Taiwan is in um in 2021 economies May edition putawa as the most dangerous place on Earth so why not semiconductor would share Taiwan or actually put Taiwan in a more even more dangerous place because Taiwan became desirable not only dangerous so that's a question that I think we can uh all take apart to uh discuss after this very brief presentation so I just have a quick run through about the taiwan's high-tech sector um in Taiwan actually the high-tech sector has long been seen as a national champion and it has been quite a long time for Taiwan to discuss to to go through this process to Foster the high-tech sector and to the extents that it is more for the Taiwanese to understand that this is the key for Taiwan not only in terms of economic development but also in terms of the National Security so um China as you know has been quite aggressively not only to invest in Taiwan but only but also invest to the world a lot of the Chinese Investments wanted to come to Taiwan by being rejected because of the understanding of Taiwan that high-tech sector especially ICT is the most important Survival game if you like the trips for Taiwan survival so the high-tech sector in that sense has been quite a long time to be forced by the Taiwanese government and has also been recognized by the Asian developmental Bank IDP to rank Taiwan as the most the first amount of developed countries in Asia so that can be seen as taiwan's a long-term trajectory to Foster the ict's development in Taiwan and to let ends Taiwan doesn't just have this hard-working attitudes and therefore that's how I become really good um this comes into how high-tech development in Taiwan has to have some connection and I'm sure that you know the picture which I didn't know because I was looking at what can be representative of the Silicon Valley and that came out so if I got the picture wrong please correct me but anyway let's Google not Chop gbt Google so to give me that picture and on the other hand is xinju Science Park which is a logo of taiwan's um Science Park which was established in 1980 so at the time of the Shinju Science Park established Taiwan was under a martial law period Taiwan was under a period not exactly Democratic but in a planned economy if I use the term of like economic turn it's a planned economy that means that the government has a resource and has will be able to was able to sort of support the Science and Technology development at the time this is important because later on I will talk about the transition of taiwan's economy now from that kind of period of planned economy in the 80s but here I just wanted to point out Shinju Science Park established in 1980 that was with the government's enormous support of the resource of the money and then the connection with the Silicon Valley is the Manpower it's a know-how how how did that happen that was a lot of the young generation of the Taiwanese students started English States and then returned to Taiwan to contribute and also to build the technology infrastructure for the Taiwanese uh Tech sector more strong among the others are the very notable examples as you know that is a tsmc's chairman of retired of course but he was the leader and then he was of that generation and led generations of the Taiwanese young scientists they also had a little bit of that kind of economic nationalism to return Taiwan to build Taiwan against the Potential Threat if you remember that was in the period of the sakuku island dispute of course the cuckoo Island dispute has never end anyway but that was a really a heap of the time that the Young Generation at the time Young Generation time they wanted to build a country and use the knowledge to force to fortify Taiwan if you like and along with the government so it has the condition of the government support has a condition of external threat has a condition of a connection with the Silicon Valley and that is important for Central Science Park to prosper now Taiwan has four Science Park not just in Juice Science Park fourth National Science Park in different areas but I still would say let's enjoy size but was the lead I still is the lead in less sense yeah and apart from that taiwan's um importance or why taiwan's high-tech sector became important it is also the production pattern so I mentioned about the connection of the know-how which was the connection with Silicon Valley right the Young Generation the students went went to the states and then returned to Taiwan to use their knowledge to fortify Taiwan to build taiwan's technology sector but on the other hand not to forget that Taiwan still has what has been really had a close manufacturing connection with China the original equipment manufacturing like pattern actually has been working out quite fine if you like from the 1980s to I would say to 2015 2020 if like it's still quite a lot of the made in um made by Taiwan but in China well the obvious reason I don't need to say much that it's a cheap labor and also the resources and everything but important points well I have a lot of the interview you told me and also Experts of course you know that uh the Taiwanese factories in China the owners all the factory owners always tell me well you know the Chinese are not very reliable because after hiring them for some time we realize that New Balance another Factory which is my employee went out and set up a factory and then they sort of took away our know-how right but the point I want here to mention why Taiwanese Factory especially in the ICT manufacturing while they are good that is the quality control and the discipline management so yes the Chinese are topical wouldn't trying to say much of like copycat of the Taiwanese knowledge in lessons but let is still that is a very important key elements no matter how and you would you would be amazed that you would think like China's authoritarian country they would Implement authoritarians Management in the factory but not working Taiwanese companies Taiwanese factories are really good in terms of the quality control and display management and this again just bear in mind is again the key in terms of the semiconductor high-end manufacturing yeah so those are the very sort of superficial points to say that why taiwan's high-tech sector is important and needless to say among the experts those are the semiconductors in the picture and this is again that I need to say this for my uh counterparts in in the UK and the Europe to say that semiconductors everything our life from the car from the microwave now charge BT you have everything and if you have the AI refrigerator you need a cheap and in that sense that that is again that is a very simple illustration how that works so again along with removing with the electronic car the traditional car you already need chips electronically you need further so with our modernization get even more sophisticated we relied on the different kinds of the trip even further so it comes to the different sizes different levels of the Chiefs that different country produce so in the sense of Taiwan the tsmc actually produced the most advanced chip manufacturing whereas if you would consider China they produce most of the chips for the car that is a bigger size and it's maturely called it as a matured manufacturing and we could discuss later on why in the past 10 15 years like why China's still not yet able to catch the advanced that is small two nanometers chip making with their enormous government support and also if you think that human resource human Talent is important Chinese young students they have all numbers Taiwanese for many many times while that didn't happen we can discuss that later but here just to say that in our Modern Life that everything rely on this little thing called chip it can can be bigger if you are talking about car and if that's the case then we need to know whether if this so important but yes more trips is embedded in our daily life whether we will be able to fortify the supply chain but unfortunately although this idea is tempting to say that we can make the trips by ourselves but unfortunately till now I would say that no country will be able to make semiconductors chips no matter is big or small from the beginning to end because it has been a quite embedded into the global supply chain in the past 30 40 years so this kind of the global network of organizations operates from the raw materials from Japan uh the equipment from osmo from uh from the Netherlands and then the packaging and the manufacturing in Taiwan and the packaging and testing in China or Malaysia if you like it's tempting to think that now if we're facing uh any um memory disaster for instance uh Russia invaded Ukraine or the natural disaster for instance called the pandemic we need to have our own cheap making in one place but it's not yet possible for a very simple reason that's too costly and there's no yet not yet with the infrastructure in a place you may think that there's a trend in the future to do so still let the cost effect it comes back to not just any given country feel like it's very costly it come back to each one of us now you can buy an iPhone I don't know how iPhone in the states how much it costs uh in the UK my phone is 500 pounds which is very low level phone but if it's possible if let uh the cheap making by individual country my very simple iPhone SC will cost at least three times four times more because the price feedback to the customer and if I just use the iPhone as example you can think every other thing as I mentioned chip is embedded in our Modern Life everything the price increase so it's not just about as I just used the Russia invaded Ukraine as a very sad case it's not just about energy it's about how did you find how do we function our life if that if we don't have trips or if our trips became three times four times five times more expensive that's why it is still I would argue not possible it's possible but if you can bear the price to make uh the chips from begin to end even though if you have the money even though you have the Manpower and then this is where so far the chips are in terms of the uh the cycle equal cycle of the chips are made in so Taiwan has been uh able to produce a 65 percent of the global chips market and the another 16 is from Samsung South Korea and the rest will be other small parts of the world you would argue that American why it's not really into the trip making it is only because that Americans are good at r d and then the production side actually the tsmc has been catering quite well and more economic more efficient and then so American designers can have a good peace of mind to design whatever they like and they have the tsmc and the like to produce so again this is an interdependence situation and if we get out from TMCC then the lower end of the packaging and testing are down to China Malaysia I feel like China still is a major testing and packaging country yeah so this is the ecosystem and it's just very simplified again because there are many many steps of complicated suppliers I haven't mentioned Japan for instance I have mentioned uh as small in Netherlands but you've heard of them they are all part of this just again if you like no one will be able to miss any of them yeah and then I'm coming to the tsmc and then I'm coming to why Taiwan is so far to see us really will be able to share the biggest global market share of the advanced trip making so one point I wanted to say is TSM is not just about tsmc as one company tsmc is an ecosystem to be supported by xinjiu Science Park I mentioned to you before because to manufacturing the chips and different various sites of the chips you can't only rely on one company tsmc need to have its satellite companies to support it and it's all surrounded by the xinjiu Science Park that kind of the ecosystem so it's in that sense it answers it's one question which I been asked many times if China just take along the tsmc worldland problem probably solved because China would have the cheese making no it can't it has to take the whole ecosystem as a truck Point yeah and tsmc again that I would still say that its benefits it's ascended or started from what this is called a developmental State stage that is I mentioned earlier in the 80s 1980s Taiwan was a planned economy and in a sense that Taiwan has been able to input a lot of resources into one particular sector you are a learned audience you all knew that Taiwan has been experienced economic transition after lifting the martial law and democracy has everything good but not very good in terms of forcing into the or asking government to input all the resources in one industry and yet Taiwan still at least someone's government still make a very much effort to support the tsmc so not just the company but support the semiconductor manufacturing to the extent I use this example that all high school students now in Taiwan are learning programming as compulsory course you could argue that programming may not just go into the same conductor I agree but I haven't seen the UK six phone students taking programming as compulsory course not showing America maybe you do but from that point of view I can see the government's efforts because understanding like Taiwan is a very small country with aging Society trying to prepare the human resource from a very young age so I didn't I didn't mention about government budget but just from the educational perspective I can see that it's a lingering of this developmental States and it's only actually for the reason that Taiwan has to understand that it's really the key for taiwan's developments and then later on we can talk about the geopolitical perspective and if I mention this example of the young you know like uh uh junior high sorry Senior High School they started to learn the programming what about the high skilled Workforce so again tsmc has four uh 40 000 to 50 000 High School workers in Taiwan and in in less as a high highly trained Engineers they work 12 hours as a shift and they work every well they don't work every day but they do work long hours as long pleasure of excellent work and in that sense I did ask many of the tsmc workers how did you sustain yourself and do you see that is sustainable and let's say well that wage is really attractive yeah to be honest and it doesn't really pay other jobs doesn't pay that much you probably heard that the pro the salary in Taiwan has been stagnant for 20 years not in tsmc so oh uh double e students physics students in Taiwan with a master's degree above wanted to join tsmc my own cousin I interviewed him so well and I realized almost everyone's cousin is in tsmc and and in that sense I asked my cousin so with his permission to share are you sure you will be able to sustain this 12 hours shift and he told me well look I'm young so if for five years or three years I don't see myself in this industry I I can I can get what I need transferable to other sectors but it's a very good trending place for me to start with and plus the weight is really high and so you my heart the tsmc has quite High turned over rates which is true this is the young people as my cousin they are having this thought that they might try their hands in tsmc for three or five years and then leave but you would ask how and why tsmc still can sustain because they are really there will be a group of Engineers they will stay and they had a very close linkage with the states and they have very close linkage with Academia and for people who stay in the tsmc they are the pillar of the tsmc so there's a saying to say that if you can sustain tsmc more than five years you will stay there for your life and the wage is good but you may not see your family very often that is true yeah um Science Park this is what I mentioned that it is an ecosystem that they support the tsmc so it's not just one company and Shinju Science Park promised to TM says tsmc light although taiwan's and energy Supply is a little bit frequent you know in in the summer Taiwan if that doesn't have a lot of friends we may we make short of water we make short of electricity but let's always 24 hours sustainable electricity and water for tsmc and the ecosystem so to this extent that is guaranteed whether that's a developmental state I leave it to you as I see that would be really a support from the government in various ways yeah so this is where I took a tour to the National apply research laboratory clean room uh Taiwan also again set up the at least four three or four semiconductor College one of them is the national applied research Library cleaning room and they allowed the students to go into the clean room and to work on to experiments the chips making in a sense that to let the student to understand what it's like and learn and has to be cleaned really really clean and so that is me uh to try to see how that can be uh they told me that to wear this uh clean rope like if you it's not in the coverage of calling that by uh it's not that but it's a clean suit it has to wear 12 hours and actually it's it does incur a lot of discomforts if you would understand it you can allow to have the toilet break of course but it is a lot of the pressure and if you understand that it's kind of the constant uh demanding on you and also wearing these uh clean suit in very clean room it cannot have any dirt and any hair in that sense so um I think loads are just giving us a little bit of the flavor of what is about uh being in such a demanding lucrative yes for the price but demanding working environments Us in the semiconductors uh clean room and then I come into this final open questions to us all while the semiconductor is a shelled for Taiwan I had others to discuss about this to talk about that was earlier time postcode Taiwan in a global semiconductor industry and a lot of the arguments are saying to say that well semiconductor really provide Taiwan a key to sort of being the survival in this kind of geopolitical game but it is also again if you think that Taiwan is an island and Taiwan is the one to produce such so far not yet to be replicate scenario in other countries and then learn dangers and desirable Parts combined together I'm not sure whether it's to make Taiwan more dangerous or more safer in less sense but one point I again wanted to mention is the semiconductor associate in Taiwan it has been not just now people knew of the tsmc probably many of you heard of tn7c probably only from last year but tsmc has been working quietly and silently in the past 60 years so what you think of taiwan's tsmc is a accumulation of the efforts and that efforts they are still making it they're still working on it in these every minutes so I do think that the semiconductor is what Taiwan is very proud and valuable but again it is not just from yesterday it has been decades Decades of the efforts to work on it and whether that can be you know replicated in other countries it's again a big question whether the workforce can sustain whether the Young Generation will be able to endure this discipline the discipline can interpret in the good and bad way discipline management quality control precise and clean and most importantly the Integrity of the manufacturing that is very big question and has to take into the different cultural context so um I would think that so far the semiconductor tsmc LED ecosystem has been working really well and I do hope personally that it can Bridge Taiwan or interact Taiwan into the world um I think I will end my very fraud and probably just the flavor of a very complicated issue here and if you are interested a Blog I have is taiwanes and not me writing I invite all contributors who are interested about Taiwan to produce different topics about Taiwan welcome to follow us and more so welcome to contact me if you have any thoughts any ideas about Taiwan thank you [Applause] [Music] first of all I want to say that actually I was also one of those Engineers not working for tsmc but we I decided after three or five years that I probably should be doing something else but uh one of the things that you mentioned actually about Taiwan investing in its young people and the education and programming courses become compulsory and the thoughts that came to me was not about the UK as you mentioned but actually about the US that in many states actually right now I believe math is becoming optional so so that gives you a little bit of perspective about the future of global competition but one of the things that I want to first start off asking you about is actually uh one one thing that you mentioned in the beginning of your presentation about OEM business model and I think probably you for the benefit of the audience maybe it would be useful to also explain a little bit more how that is unique to Taiwan or maybe tsmc and and and whether or not that is something that led to the success or in the future whether or not that model will still be sustainable Wellness actually before this project when I was doing other projects of the Chinese investment in taiwan's high-tech sector I thought OEM should die because OEM it's it's in a way it's just a Contracting you manufacturing of your designer what they want and you take their contract and you you just make it happen and for the benefit of the audience OEM stands for original equipment equipment have the designing have the innovation I would opt for odm because odm you would capture most of the profits and OEM you only get a share because the contractor whether it's American company or a British company or a European company they had a design sent over to the old OEM contractor as tsmc tsmc make of it and because of that so the profits share is much lower because the brand should get most of the profits right so um that's the reason why at the beginning I thought OEM module would die but what I see tsmc is beyond OEM they Beyond just to answer the contractors requirements they work with them and they provide their suggestion innovatively with their suppliers with their contractors most likely apple and other tech companies and they they make the contractor has to work with the TSM see in a sense to know whether their blueprints can come true or just stay in the air so that is revolutionary to my very ignorant thought I thought OEM would die but actually it is the success of the tsmc not just because they obediently to follow what the contractor require they work with them they sort of if you like make their dreams to come true so why wouldn't that be successful and in your presentation you haven't talked a lot about or about the chips act which I guess here in the US a lot of people would be reading the news watching on the news about it and thinking whether or not is a good strategy for for this country and for the whole semiconducted supply chain so what do you have to say about that particular strategy and and hey and what do you think people or companies particularly including Taiwan tsmc or the government what do they think about it really what do they think about it really I don't know but I can give you a guess um the companies uh at least um I haven't spoke with American companies to be honest uh I would imagine that they would work on the chipset because there's input a lot of the uh support to the developments if you like r d sectors but I do spoke at this book this week with companies in Taiwan and Japan um it's a bit worrying from their perspective because it would be seeing from outside us to you know exclude the supply chain the ecosystem so lead is something you know you can't win all the hearts and mercy the chips Act is to fortify its domestic Supply which understandably but for your partners it sends out a message that we probably wanted to work on our domestic supply chain um we you might be replaced and this is the message that I get from Japanese Taiwanese companies in lessons and I would actually think that it's important for any countries including United States and also eu's cheap sex to work with online alas companies not just governments because remember all the silicone uh like-minded countries are all democracies democracies companies don't work just to listen to what government says as you know so you do need to engage with the companies rather than just with the governments because the governments can say yeah we listen to you but our companies may not may have a different thoughts okay do we have plenty questions from the audience here or a seated gentleman in the back first yeah uh hold on maybe we will get the mic to you oh thank you okay for you is of course we're sitting here in Silicon Valley and the Silicon in Silicon Valley was originally from the chip industry which is mostly long gone except for a few specialty producers and one can say it went elsewhere for low cost but I would argue it primarily went because of the reaction from the environmental movement and it was pushed out of Silicon Valley not the design capabilities but the production capabilities now uh the U.S government wants to reassure the industry it's giving significant subsidies and companies like Micron for example uh will need to take those subsidies and uh they're proposing to build a large Foundry in Upstate New York but already before a single construction is undertaken they've committed that there will be a non-polluting industry what is the status of these issues in Taiwan it's often said that well it's an island so we just flush it out into the ocean don't swim around Taiwan really no no um yeah environmental standards is actually the big issue and also um actually it's also energy supply for that for that matter so Taiwan has been continuous manufacturing with the close eye of the environmental standard but you would also bear in mind that this is the supply chain that we are Taiwanese are doing um I wouldn't say they are yielding lower environmental standard but there would be a more of the compromise so it's come back to each individual country's domestical contest and Marcus you rightly mentioned why would you compromise of the environmental standards or why would your Young Generation would compromise with this kind of a working condition you would have other choices that probably would not be the same situation in Taiwan yeah but this is what I would say I wouldn't be able to really go into the environmental standards details and I think that tsmc has been trying to follow and try to put a Greener but to be honest how can you make that a better situation it is polluting yeah so and doesn't that give some other countries a a advantage in that regard you know other countries that are emerging in the areas of fabrication and production in semiconductors like Vietnam or or India and so on but again this come back to my another point it's not a huge cab o and human talents and you have a vast natural resource you could exploitate you will make chips that is different it's a high skill training workers and the resistances of the working force and the innovative strengths that you could produce and it does take time it does take years yeah yes uh Larry and then the gentleman in the back yes okay I have two questions one is how tsmc and other companies in Taiwan in this sector are viewing uh production in mainland China because part of what a lot of other democracies are are worried about is Interruption of physical supplies from China and the whole kind of movement toward um not necessarily and not even imaginable reassuring everything to the U.S but to just destoring it from a country that might weaponize the supply chain and the second thing is um you know we understood that you know tsmc and certainly the sector more broadly and you kind of implied this is sucking up virtually all the available engineering talent in Taiwan so what is taiwan's plan when it runs out of electrical engineers in Taiwan yeah well Larry the first question is tsmc has invested in Nanjing as you know yeah and the gov the gamma again because it's a democracy Taiwanese government cannot say you can't go to China but taiwan's government can set the barrier of how much Tech uh barrier that you could invest in China so if my marriage served me correctly that is tsmc cannot go there Beyond eight nanometer and the Nanjing song Jiang lead factories are already settler uh tsmc still are in China so you would be very uh probably surprised to see that but again this comes back to what is the business and what is the national interest and even in Taiwan even the tsmc still and tsmc they would argue that you know don't worry about the leaking of the business confidential interest we're not still but so we are we are in the business we are just investing we are not leaking the the confidential business interest that's their argument but Taiwanese government already said very clearly you can't go beyond eight nanometer and TSM has been complied in that sense um but I don't think they can restrain them not to go to China they can they did and as the United States uh use the Expo control but companies in my observation always have ways to circumvent it yeah lesson on topic really um what about running out of the engineers that's actually a worry Taiwan is the Aging Society it's the lowest birth rate in Asia so um I don't have a very good question really um I really think that um in the Years this is this is this question is talked into whether let's correct you have to put Ox in one backseat you know and Taiwan has been in a sense to put Ox all human talents in one sector and so far the sectors use sustainable but what about in five years ten years time with this low burst rate and also aging society that is a warring yeah and maybe that would be really important to have more of the collaboration with American Youth would you like to come to Taiwan to work yeah yeah it seems like Japan Korea everybody is the Asian all of them are Asian Society those that gentleman in the back over there and maybe let the two uh let the two gentlemen have both ask the questions and then Changi you can answer uh afterwards so hi thank you for the presentation my question is um there within Taiwan there's uh sort of the more U.S skeptic or even anti-us parts of the population kind of uses um sort of U.S desire or demand for tsmc to move some operations to the us as a uh you know argument for saying things like what the US is trying to hollow us out the US is trying to take our advantage but on the other hand you have certain uh voices in the U.S saying you know this is we're doing this because Taiwan might be a dangerous place to do business it has to be American-made you know there's almost a protectionist attention to it um what would you say might be a better attitude from both sides and how we might be able to get closer to that attitude and this this gentlemania thank you Dr Lee for sharing us This Magnificent story of tsmc so I'm from the investment management business so I wanted to hit on your point about the cost of an iPhone you mentioned 500 pounds in the UK and also I think not just only overcoming the know-how in the manufacturing part of it right so there's also an economic equation I think some investment analysts have made a rough estimate that if you can overcome the skill Gap and bring the manufacturing and Engineering onshore even to the US the cost would be more than what you cited I mean you mentioned three times but I've read numbers like 10 times maybe even 20 times so I wanted to ask you is there any academic research in backing that type of claim of the enormous cost that it would uh basically result in in terms of onshoring some of these semiconductor skill set so that's that's my question to you if you have some academic information to share that you you want to answer things question first yeah okay thank you thank you for both questions I answered the gentleman question and come to you yes there's a different perspectives I think in Taiwan and in the states of tsmc investing in Arizona right so um what is the better attitude of that I think a better attitude would be if one in Taiwan I think would be to get out from these partisans because it's again that was hit up by the opposition parties and to say that okay this is hollowing out and also stalking all of our Engineers which is not true tsmc only sent like 100 wanted to send a hundred sorry not 100 1000 Engineers to the states and not yet really Apple too and it is it would not be to put all the Taiwanese Engineers to the state it doesn't work in any industry it has to be localized but the question again come back to the question whether this kind of the high pressure discipline management would acute would be attuned to the Americans you know domestic job market situation this is actually a very thorny issue for tsmc because I knew that probably I heard that has missed say that Americans training system probably is different from Taiwan so that is that they suggest tsmc has to face but the attitudes within Taiwan domestically I would say that it's you know low solidity based that it comes and goes in that sense and it's a lot of the debate has to be clarified because it's just basically not true yeah and tsmc also say that like invest in Arizona because of a close to the market as well as they invest in Japan close to Marquis Sony yeah and they are discussing whether that's possible to invest in Dresden in Germany against close to Market you could take it or leave it well or less under the Market's reason or geopolitics yeah for your question um academic do think of that that's for sure but so far to be honest the the additional this kind of economic cost I really see a lot from the um Sia the semiconductor industry Association and also the business report in that sense but this is why I personally think it has to take into consideration because the coast is not just to a country it's to every individual one of us and that has to be understood in many many ways and I think it's more important rather from what academic has to know which personally I start to know but I think it's to the policy maker and that is another big debate on that and I don't think that a total issue will work I just honestly don't think so because reality is not like that yeah I got a couple of questions from the audience on Zoom so I'll read it out to you and see if we can use some time in the end to answer these questions first one from John asking that do you think that we can duplicate tsmc in this country in the US the second question uh very related but probably on the other direction is from Lindsay asking will the Taiwanese design manufacture the advanced chips in the US so I suppose yeah maybe you can also answer like what are the kind of tsmc what are they doing in in Arizona what what level of advanced trips that they're doing right so in Arizona it is Advanced trips it's two nanometer so that is Advanced um cheap manufacturing Arizona they wanted to start with I think a Foundry already established and last uh talking about to have a second one um weather can be whether American can do what tsmc is doing I think this question has to be testified by time and actually to be honest uh intel was manufacturing the chips long time before why it didn't sustain why it didn't work out or basically that was more because the SMC would be able to answer the customers requirements more flexibly and well with all the environments everything that's concerned so well all the time to the situation that American can do what tsmc is doing I think it's a really big question I I don't really have an answer and I don't really think that would be very possible in that sense maybe not very quickly huh definitely not quickly one other question from the audience on Zoom is from Leo asking uh recently I might say actually not so recently a Chinese company have been pursuing talents working in the semiconductor industry from South Korea from Taiwan with very lucrative salary and benefits and shares and so on right so what's your thought on this trend and I might also add in addition to attracting talents from these other chip countries uh what about actually also uh Chinese returning to uh the mainland to pursue their career in this area how is it going to play out for the future of High nurse a semiconductor future development yes this is a very good question thanks Leo and it's a puzzle for me I mean for Innovation you need huge amount of money you need talents China has both the government has money there are so many talented people in China why China hasn't yet had a breakthrough I would argue that Innovation manufacturing does not just need money and people it needs also the flexibility of innovative it's not just a top-down you need to have button up Innovative setting to respond to the request and to be flexible and this is what I haven't seen China would be doing and not to say like a lot of government fund actually gone into the wrong places um local government's corruption and the the name of here and there it just doesn't really work and the return need yes that's true and also the haunting of the talents to be honest I would say that in uh five years ago when I went to xinju Science Park there were many of the engineers told me that well our colleagues were headhuntered by the Chinese they went to China with the same salary the same figure but in Ramin B so that is five times more than a Taiwanese dollar and they also set them up with International School in Shanghai a very luxurious Apartments so all good and I was really worried that it was a brand drawing from Taiwan to China and I think was the same situation of any other Democratic country to China but then after that when I returned back to Taiwan to say so what's the scenario now and let's say well actually those Engineers feel like they are not really able to stay in China because they feel the Chinese company were just used their knowledge and then they didn't really give them more of the chance and then so they return and there's again not many of the I think the brand drawing training situation or the brand stocking situation from China to other countries had the time had a big time but it just with the current situation with the past years whatever happened of the covets whatever happened with xinjiang what have happened with Hong Kong eight put off Democratic talented minds of in a country which you don't feel you could be attuned with no matter how much money you can get thank you thank you what do you think what do you think is the most likely form of intervention that Beijing would exercise on tsmc okay and maybe quickly this gentleman here yeah support the Taiwanese government gives to the the chipset sector or tsmc in specific especially compared to like China and or the US like the chips Act is like whatever 50 billion dollars like how much does that compare to taiwan's support uh especially over time and to China's support as well right so uh first question is about China's intervention on the tsmcs um China in many ways wants to eat events not just by the government but also through the hate hunting of the tsmc's engineers and also um in many ways that uh working in tsmnc trying to get the knowledge and then you know return to the trans government so China has various ways but the important key factor of the tsmc is first of all they are very atomized so each workstation they don't talk with each other they are not able to share the knowledge even within themselves so my uh not my cousin another cousin of my friend told me that he doesn't know what other workstation was working on and that is not because of China that has been tsmc's commitment to all his suppliers they are lawyer they wouldn't dig their business confidential interest so in that sense China had a fortified the government all the companies they tried to get in they have to be defended because not because of the China Taiwan tension because of the uh the uh their way of the functioning the business yeah and what subsidy Taiwan government is giving to tsmc I don't have the exact number but it's accumulation of decades so Taiwan if you like can think of the chips act since 1980s learn how much figures right yeah well I think it's about time and uh thank you very much Dr Lee give her yep and before we go I just want to remind you that our winter seminar series next Tuesday go back to the uh back to Tuesday March 14 we'll have uh Matthew guys call Gensco uh of uh Stanford University uh professor in technology and economy so thank you very much only again thank you

Channel: Stanford Cyber Policy Center

Views: 367

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Id: pJ7_oTMTNiI

Length: 60min 49sec (3649 seconds)

Published: Wed Mar 08 2023