Quote of the day by TSMC founder Morris Chang: ‘Globalization is almost dead and free trade is almost dead’ — a post-mortem on the tech supply chain breakdown
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The Taiwan Semiconductor Manufacturing Company (TSMC) is one of the most significant and powerful forces in the technology world today.
While it’s not the only chipmaker out there, it produces around 90% of the world’s most advanced semiconductors and has up to 70% market share of the global contract chip-making market.
“Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don’t think they will be back.”
Global fracturing
The founder of TSMC, Morris Chang, gave his verdict on the state of the global supply chain during the opening ceremony of the company’s advanced chip plant in Arizona.
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Chang was careful not to describe the global supply chain or globalisation as completely dead but “almost” dead – indicating that it still exists in some way but has been heavily reconfigured to adapt to changing times.
There are several reasons for this, including rising geopolitical tensions, especially between the US and China, as well as a move toward manufacturing repatriation and the formation of blocs rather than the promotion of ever-closer global ties and free trade for the sake of it. That is the context in which TSMC began operating, and a way of the world that is being lost.
Crises and shocks
Since COVID-19, there have been a series of supply chain shocks that have hit businesses and, in the end, consumers when it comes to the price of technology.
The chip crisis that lasted between 2020 and 2023 was the most disruptive shortage of technology that hit countless sectors worldwide. This was caused by the surge in demand for electronics, with people homebound due to the lockdown measures, the geopolitical cracks that started to form, as well as the death of just-in-time logistics.
Although the crisis eventually abated, a new shortage in memory has hit companies and consumers across the world in a similar way. These new problems, however, are more attributable to the AI boom, in which the surge in AI data centers and demand for high-bandwidth memory have led to bottlenecks in the production of consumer-grade memory like DDR5 RAM and SSD storage.