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author 丨 dongmu chu

produced by china business strategy丨ID：hstl8888

recently, the huge subsidies provided by the united states, europe, japan and china to tsmc have attracted attention, and the factories in these four places have also been in the news.

an explosion occurred at a factory under construction in phoenix, arizona, usa, seriously injuring at least one person; the long-planned dresden factory in germany started construction; kumamoto prefecture in japan is actively striving to build a third factory; tsmc's nanjing factory obtained the "certified end user" authorization from the us department of commerce.

in the competition for tsmc and cutting-edge chip manufacturing processes, the four factories are showing off their skills. whose subsidies can bring the most desired results?

on august 20, tsmc’s first factory in europe officially started construction in dresden, the capital of saxony, germany.

at the groundbreaking ceremony, the guests holding shovels to dig the soil included european commission president ursula von der leyen, german chancellor scholz, tsmc chairman and ceo wei c.j., and saxony governor kretschmer.

according to the investment plan in public information, tsmc's dresden plant will produce automotive semiconductors and other products, and mass production is expected to start in 2027.

the total investment in the factory exceeds 10 billion euros, of which tsmc contributed 70%, and the remaining 30% was shared by german automotive parts giant bosch, automotive semiconductor giant infineon, and dutch semiconductor manufacturer nxp.

this factory carries europe's chip ambitions. according to the european chip act passed last year, the eu plans to invest 43 billion euros in the semiconductor industry by 2030, increasing the global market share of european-made chips from the current 10% to 20%.

in his speech, scholz expressed the significance of semiconductors to germany: "semiconductors are the fuel of the 21st century economy and the core of the future of germany, an industrialized country. it is of great significance to expand semiconductor production capacity in europe and germany. semiconductor supply cannot rely on other regions."

von der leyen stressed the importance of "supply security" to europe: "with the arrival of tsmc, the entire eu industry can benefit from a more reliable supply chain and tailor-made new products, especially in this era of geopolitical tensions."

von der leyen did not come empty-handed, she also brought a "gift". the eu has approved germany to provide 5 billion euros in subsidies to tsmc's factory. this is the largest subsidy given by the european chip act and germany's first subsidy plan.

tsmc chairman wei zhejia naturally expressed his gratitude for the gift. he said that the company has received strong support from the european union, germany, saxony and dresden at all levels."very happy, very perfect."

in addition to being "perfect", germany's huge subsidies have also encountered opposition.

schmidt, director of the leibniz institute for economic research, questioned, "in the long run, instead of spending money like this, it would be better to use the funds for the research and development of storage technology or the infrastructure for the import and export of hydrogen energy."

the rheinische post believes that the 5 billion euro subsidy is not worthwhile: "according to what the company said, it can create 2,000 jobs locally, and the cost of each job is 2.5 million euros. if the government is so generous, the electricity costs of the german chemical industry are too high and it also needs subsidies.

with so many eyes watching, tsmc's german factory cannot afford to make any mistakes, and the key to successful mass production lies in talent.

in august, the first batch of german college students who went to taiwan for training have returned home. after internships in factories, they have a new understanding of tsmc. a college student in dresden was deeply impressed by tsmc's "lunch break culture" because he never took a nap in germany:

"after lunch, everyone would lie down on the table and sleep. later i realized that this was to give them more energy to work overtime. now i have also started practicing taking naps."

according to tsmc's plan, 100 german college students will go to taiwan for training every year in the future. they will first take a semester of courses at a local university and then intern at tsmc's factory for two months to reserve management talents for the german factory.

for the junior students who want to join tsmc, the first batch of people who have completed the training have the following suggestions:“learn some chinese. no one expects you to be fluent, but knowing basic chinese will get you a long way.”

in april this year, the u.s. department of commerce announced that it would provide tsmc with up to us$6.6 billion in subsidies for the construction of a factory complex in phoenix, arizona.

commerce secretary raimondo reiterated that “ensuring that the united states can produce the world’s most advanced chips is a matter of national security, especially as ai is developing rapidly.”

the $6.6 billion in subsidies comes from the chips and science act passed by the u.s. congress in 2022, which aims to promote the return of chip manufacturing to the united states. the goal is for the united states to account for 20% of the world's cutting-edge chip production by 2030, which is comparable to europe's goal.

according to us media reports, the $6.6 billion will be disbursed in stages, and the specific implementation will depend on the achievement of project milestones.

at present, it seems that tsmc still has a long way to go before it can earn $6.6 billion. they have spent nearly four years in the arizona desert and have not yet started producing chips.

in december 2020, under pressure from the white house and the u.s. department of commerce, tsmc announced an investment of us$40 billion to build a factory in arizona, usa, to produce chips that power iphones and fighter jets.

among them, the first factory produces 4-nanometer chips, which were originally planned to be mass-produced in 2024, but have now been postponed to the first half of 2025; the second factory produces 2-nanometer chips using the next-generation chip structure, which are expected to be produced in 2028; the third factory is aimed at chips with 2-nanometer or more advanced processes. in the news released by tsmc, the estimated time for mass production of this factory is:

the end of the 2020s.

tsmc's us factory is located in the northern suburbs of phoenix, arizona, surrounded by desert hills for several kilometers. the area of ​​the factory is equivalent to more than 620 football fields.

with 2,200 employees working in this huge factory in the vast desert, the cultural conflict between taiwanese managers and american workers has left both sides feeling unhappy.

in 2021, tsmc's us factory started construction, and 600 american employees flew to tainan for training. it was the first time they saw tsmc's semiconductor production line. even their parents had never set foot in an advanced manufacturing plant, so when they saw the elevated track accurately transporting wafers one by one, everyone opened their eyes wide:

“it was as if we were visiting some creature greater than human.”

challenges followed. american engineers discovered that people in the factory only spoke minnan dialect and mandarin. they could not attend high-level meetings in mandarin and could only communicate with taiwanese engineers using google translate. it was even more difficult to read chinese materials.

during the training, the manager will conduct a stress test, that is, a certain task must be completed on the same day or week, in order to ensure that americans can also adapt to working overtime and sacrificing personal time for the deadline. for american workers who fail to complete the task, the manager will suggest:

"you'd better change your job."

according to american employees, dozens of them resigned midway.

in 2022, american employees who completed training returned to arizona to prepare for mass production together with hundreds of taiwanese employees.

the intensive work contact caused many conflicts between the two sides. taiwanese engineers complained: "american colleagues are arrogant, like to challenge orders, and are difficult to command." the americans were also very angry: "they always pretend to work overtime, arrange unnecessary work, and beautify the data for customers."

recruitment is still ongoing. the first and second factories will need 6,000 positions in the future. american employees who have resigned will give tsmc low scores on the workplace app, and some people have tried to persuade their engineer friends not to go to arizona to suffer.

three years after construction began, tsmc's first factory in the united states has still not been completed, causing the second factory, which was originally scheduled to start operating in 2026, to be postponed to 2028.

experts pointed out that tsmc's first and second factories in the united states are expected to produce 600,000 chips annually, a fraction of the current 16 million chips, and they also need to be shipped back to taiwan for testing and packaging because the packaging company's arizona factory has not yet been built.

the progress was not as expected, and taiwan shouted: "the united states must provide continued support to tsmc. we spent 30 years building a chip ecosystem, and all this must be done from scratch in the united states."

in february of this year, tsmc's japanese factory opened first. at a weekend party in phoenix, a taiwanese engineer said disappointedly:"the japanese factories started mass production first, and i was so frustrated."

the subsidies from the united states have not arrived, but the subsidies from mainland china and japan have arrived.

according to tsmc's latest financial report, in the first half of 2024, it received subsidies totaling nt$7.956 billion (approximately rmb 1.75 billion) from mainland china and japan. in 2022 and 2023, the subsidies from china and japan were nt$7.051 billion (approximately rmb 1.551 billion) and nt$47.545 billion (approximately rmb 10.460 billion), respectively.

according to japanese media reports, the japanese government will provide subsidies of up to 1.2 trillion yen to the kumamoto no. 1 and no. 2 factories in stages.

on august 26, kumamoto prefecture governor kei kimura visited tsmc's hsinchu headquarters and personally asked tsmc executives to "build a third factory."

tsmc ceo wei zhejia believes that after the first and second factories in kumamoto are actually operational, if local residents support it, they will consider building a third factory.

three months ago, the newly appointed kimura kei publicly stated: "we fully support tsmc and hope to build kumamoto prefecture into a semiconductor industry cluster."

during the construction of tsmc's kumamoto plant 1, there were problems such as road congestion caused by the arrival of materials. governor kimura said: "the prefectural government will go all out to ensure the smooth construction."

tsmc's kumamoto no. 1 plant produces 22/28 nanometer and 12/16 nanometer chips for logic operations in automobiles and electronic equipment. it mainly supplies japanese automobile manufacturers and sony's image sensors, with a monthly production capacity of 55,000 pieces, and is expected to be shipped before the end of the year.

the kumamoto second factory plans to produce 6/7 nanometer cutting-edge chips. construction is expected to start in the fourth quarter of this year and be put into operation in 2027, with a monthly production target of 60,000 pieces.

at the same time, in hokkaido, more than a thousand kilometers away from kumamoto prefecture, rapidus, a semiconductor manufacturing company founded by eight major japanese companies including sony and toyota, is also racing against time to build a factory with the goal of mass-producing the most advanced chips in 2027.

japan will invest 5 trillion yen in rapidus to achieve the revival of the semiconductor industry.

let’s take a look at tsmc’s factory in nanjing, which is numbered as fab 16 on the official website.

fab 16 is located in pukou, nanjing, with a total investment of us$3 billion. at the groundbreaking ceremony held in july 2016, morris chang attended and gave a speech: "jiangsu's integrated circuit industry is developing rapidly. the nanjing plant will be the first 12-inch wafer plant in mainland china that can mass-produce 16-nanometer process technology."

in october 2018, tsmc nanjing plant held a mass production ceremony. a tsmc executive commented:"the nanjing plant broke many tsmc records. it was not only the fastest to build and put into production, but also the most beautiful plant."

it took less than two years for the nanjing plant to go from construction to production. even tsmc's kumamoto plant, known as "asian speed", failed to break this record.

another record of the nanjing plant is the fastest profitability, turning losses into profits in a single quarter less than a year after mass production began.

in the early days, the nanjing plant mainly used 12/16nm process, with a monthly production capacity of 20,000 pieces. in 2021, the epidemic caused a global chip shortage. tsmc expanded the production of the nanjing plant and expanded the 28nm mature process production line with a monthly production capacity of 40,000 pieces.

in may 2024, tsmc announced that the u.s. department of commerce granted tsmc nanjing plant the title of "verified end user" (veu), which means that the nanjing plant obtained "indefinite exemption."

u.s. suppliers can supply semiconductor equipment to chipmakers on the veu list without any license.

tsmc also pointed out that the us veu authorization does not add any new permissions. the nanjing plant can maintain the status quo but cannot obtain cutting-edge chip manufacturing equipment.

some people say that the expansion of tsmc's nanjing plant and the us "license" are the "stings" that penetrate into china's chip industry. they are intended to curb the development momentum of mainland manufacturers such as smic in mature processes and should not be subsidized.

to some extent, this makes sense.

if leading mainland chip manufacturers such as smic want to move into more advanced processes, they need sustained profits to support them. the existence of tsmc's mature processes will naturally form competition with them, and even form a dimensionality reduction attack on them.

but on the other hand, after years of practice, we should also understand that just having money is not enough to make real chips. just as the existence of tesla has promoted the development of new energy vehicles as a whole, having a "catfish" in the market to stimulate local companies to work hard is often more effective than the so-called policy protection.

in fact, smic and other manufacturers also achieved higher revenue in the first quarter of this year than in the same period in history, which shows that the expansion of tsmc's nanjing plant has not played a role in curbing domestic manufacturers.

trying to reduce competition and growing flowers in a greenhouse is a bad thing.

from dresden, the "silicon valley" of europe, to phoenix, the birthplace of semiconductors in the united states, to the factories in kumamoto and nanjing, the two strategies of europe, america, china and japan in the chip industry are also revealed behind this:

what europe and the united states want is to ensure the security of the supply chain and control the production capacity of cutting-edge chips; what china and japan want is independent research and development to catch up with or even lead in technology.

whoever can achieve the desired results, of course, needs to make good use of tsmc's cards, but more importantly, it may depend on who can better integrate global technological resources and develop local markets: even tsmc, even the united states, cannot continue to make and produce chips on their own.

[1] “tsmc holds groundbreaking ceremony for first european factory” nhk

[2] “tsmc receives $6.6 billion in subsidies from the us government to build third plant in arizona” lianhe zaobao

[3] “tsmc: nanjing company has been granted “authorized end user” authorization by the u.s. department of commerce”, first financial daily

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