Taiwan minister says he's not concerned by China drills' impact on chip sector

Topco Scientific Co

30/05/2024 11:33

TAIPEI, May 30 (Reuters) - Taiwan's newly appointed
Economy Minister J.W. Kuo said on Thursday that China's military
drills are nothing to worry about and there is healthy interest
from foreign firms who want to work with the island's crucial
chip sector.
    China, which views democratically-governed Taiwan as its own
territory, has ramped up its military activities around the
island over the past four years, including staging war games
last week.
    Any conflict over Taiwan would devastate global supply
chains, especially for microchips.
    Taiwan Semiconductor Manufacturing Co (TSMC)  2330.TW  is
the world's largest contract chipmaker, the main supplier of the
chips powering the boom in artificial intelligence (AI)
applications, and a major supplier to companies including Nvidia
 NVDA.O  and Apple  AAPL.O .
    Kuo, previously a senior executive at TSMC supplier Topco
Scientific  5434.TW , told reporters that it is really only TSMC
that can produce the chips used for AI.
    "Lots of countries have given up - they don't produce AI
chips," he said, having taken up his new role last week
following the inauguration of President Lai Ching-te.
    "So we can see that the whole ecosystem is in Taiwan."
    Suggestions about making the chip industry "Taiwan plus
one", and spreading out manufacturing to other countries, is not
that feasible, said Kuo, whose ministry oversees the development
of the chip industry and approves overseas investments.
    "This is very, very hard. The technology is all in Taiwan.
    "More and more foreign manufacturers want to collaborate
with Taiwan," Kuo added. "China's military drills are nothing to
worry about, otherwise there wouldn't be so many foreign
companies who want to invest in Taiwan."
    TSMC is building and opening new factories in the U.S. state
of Arizona and in Japan and Germany, but Kuo said those will
only produce a small percentage of chips compared with what will
still be made in Taiwan, and less advanced ones at that.
    Kuo said he had met TSMC Chief Executive C.C. Wei on
Wednesday as he was an old friend, just for a chat.
    "They are a company that needs the services of the Economy
Ministry," Kuo said.

 (Reporting by Ben Blanchard and Jeanny Kao; editing by Mark
Heinrich)
 ((ben.blanchard@thomsonreuters.com;))