Barriers to Chinese chip development will arrive soon

Countries will try to stop their IP ending up in Chinese hands

Morris Chang, chairman of Taiwan Semiconductor Manufacturing Company (TSMC) has said that Chinese chip development might hit a brick wall soon.

Talking to Digitimes Chang said that many countries will try hard to prevent their advanced technologies from flowing into China.

Semiconductor players in South Korea, the US, Japan and Taiwan are all well aware that China will become a tough competitor in the semiconductor market in the future, and will therefore seek to “contain” China in one way or another.

The best way is to deny China access to their advanced process technologies.

However China’s ongoing heavy investments in the semiconductor development and major talent hunting campaign would pay off somewhat.

Putting $ 10 billion into the industry will bear some fruits, especially in terms of market share gains for mature process technologies. He continued there is almost no threshold for accessing the mature process market with support of sufficient financial resources.

He added that TSMC is not willing to surrender its market share in mature technologies to others, but shareholders will neither like to see the company vying with China competitors in the mature process segments at the expense of profits.

TSMC’s management will have to weigh the pros and cons before making optimal decisions, according to Chang, who will retire in June 2018.

When China first moved to develop the semiconductor industry in 2000, the overall development strategies were not available then, let alone the injection of substantive investments.

But the scene is different with the ongoing round of development supported by sound overall strategic plans and huge investment funds.

However China cannot skip the entire learning curve and that will take time, he said.