TSMC Vice Chairman Says "Taiwan Semiconductor Supply Chain Needs Reorganization"

Yu Zhenhua, Vice Chairman of TSMC, the world's largest foundry (semiconductor contract manufacturing) company, advised that the domestic supply chain of Taiwan's semiconductor industry needs to be reorganized.

People are attending the completion ceremony of the TSMC Global Research and Development (R&D) Center built in the Baoshan area of Hsinchu, northern Taiwan, last July. / Photo by Yonhap News

According to Taiwan Central News Agency and Taiwan News on the 9th, Vice Chairman Yu said at a forum held in Taipei the day before that "the supply chain is excessively long, exposing it to the risk of disruption" regarding the current status of Taiwan's semiconductor industry.

He also pointed out that because Taiwan's semiconductor industry prioritizes specialization, each stage of the manufacturing process is in the hands of different contractors. Vice Chairman Yu viewed this practice as leading to long supply chains for specialized semiconductor manufacturing equipment and raw materials, increasing the risk of production interruptions.

He emphasized that the global trend in the semiconductor industry is moving toward expanding localization and reducing globalization to mitigate supply chain risks.

He also advised that semiconductor-related educational institutions should begin nurturing talent to seize the numerous opportunities that may arise in the near future due to the emergence of new technologies, materials, and equipment.

Vice Chairman Yu added that TSMC encourages innovation, which is a key factor in the success of Taiwan's semiconductor industry, and is promoting projects to establish new fabs (semiconductor manufacturing plants) not only in Taiwan but also in the United States, Japan, and Germany.