What is happening between Taiwan and Italy on microchips
The talks about a possible cooperation actually started, timidly and under the radar, already in the spring of 2021, when the global shortage of microchips attracted the interest of the Draghi government and in particular of the Minister of Economic Development Giancarlo Giorgetti. The attempt to accelerate is in recent weeks, coinciding with the impasse in which the negotiations already underway for some time between Tsmc and Germany have entered. Interlocution between the Italian front and the Taiwanese front exists but, according to sources informed of the affair, there is still nothing concrete. From the recent discussions carried out in the area between the Milanese and Brianza, it is explained, they have not yielded significant results. The hope of those who believe in the project is that the stalemate on Germany and the possible closure of the deal between Berlin and Intel for a factory of the US giant on German soil could open chinks for Italy.
Taiwan plans a future beyond microchips Not just semiconductors. Taipei is a leader in many other technological sectors and now focuses on space, electric vehicles and wave materials. Spaces for cooperation with Europe Tsmcin Europe? With the German stalemate, Italy tries to fit in. On the sunset of the Angela Merkel era and at the dawn of the Scholz era, the agreement between Tsmc and Berlin seemed to be a done deal. And the location of the possible plant had already emerged with insistence: Dresden. Then something changed. Germany's slowdown was somewhat anticipated at the end of January, when Taiwan-based GlobalWafers's € 4.35 billion takeover of Germany's Siltronic jumped after the deal did not receive the green light from regulatory authorities by the end of January. useful time. GlobalWafers reacted by expressing "strong disillusionment", explaining that it would "analyze the German government's failure to make a decision considering its impact on future investment strategy". Ergo, more than likely a stop to the German plan. Did the non-acquisition lead to a study on another European country? Not for now, indeed the Taiwanese company is devoting its attention to the United States. A clue that the German stalemate does not necessarily lead to a repositioning on Italy.
Germany offers greater expertise and represents (va) for various reasons the preferred option by Taiwanese companies for any investments in Europe. Italy, for its part, can certainly have a lower labor cost. A theme dear to Tsmc and its founder Morris Chang, who in a recent interview talked about the tribulations related to the plant opened in 1997 in Oregon. An operation destined to be a milestone and instead become a half trap due to the 50% higher labor cost and, last but not least, the lack of talent and an integrated system. If the United States dominates in chip design, Taiwan is unrivaled in manufacturing and assembly, of which it holds about 60% of the global share. 50% with Tsmc alone.
Chip tensions between the US and China are threatening Europe's largest technology company ASML has managed to become a global leader in a crucial sector for semiconductor manufacturing: now though the US strategy towards China risks making it lose its primacy Two knots: subsidies and geopolitics Two points, however, are the absence of talents and an integrated system, which would seem not to play in Italy's favor. Another difficult issue is that related to subsidies. Taiwan asks for 50% of government subsidies against a 10 billion investment. Not very easy, especially if the chips developed (as pointed out by the Corriere) are not the most innovative ones, given that the Chips Act of the European Commission provides for them only on projects involving the most advanced technologies.
But Tsmc, although being more and more present with its own factories around the world, it does not seem willing to produce the latest chips abroad. Not even in Arizona, where it will open its plant in 2024, as announced in the summer of 2020 at the end of the Trump administration. A 12 billion factory that will produce 5-nanometer semiconductors, which by then will have already been vastly surpassed. Mass production of 3-nanometer chips will begin in the coming months at the Tainan plant in southern Taiwan, while 2-nanometer ones are already being developed at Hsinchu headquarters.
Today Tsmc seems to be paying more attention to other shores. In addition to the United States, construction of a plant in Japan began at the end of April. The Tokyo government has paid out large subsidies to attract the Taiwanese giant. As evidence of the political relevance of the move, the fact that even former premier Shinzo Abe (still deus ex machina of Japanese politics) played a role in the position reserved for him in the task force set up by the executive precisely on semiconductors. A dialogue is also underway with India, another Asian country that is investing heavily to take home at least one piece of manufacturing of the microchip areas.
Why in China the digital giants are throwing themselves on chips After having ended up in the crosshairs of Xi Jinping and his common prosperity, the Chinese tech giants are trying to relaunch by focusing on a crucial sector for Beijing's ambitions: that of semiconductors The role of China Without forgetting that, beyond the plans of democratic supply chains and globalization "between friends", the technological cord between Taipei and Beijing is far from severed. In the first three months of 2022, orders placed by companies in the People's Republic contributed to 11% of Tsmc's turnover, a sharp increase compared to 6% in the same period of 2021. In recent months, Tsmc has supplied the Chinese Oppo technologies for the development of 3-nanometer chips. SiEngine Technology, a Wuhan-based company specializing in the design of automotive chips, will also use Tsmc-branded products. The cordon is not severed for political as well as commercial reasons. In the absence of dialogue between governments, the tech giants act as diplomatic ambassadors, as happened in the purchase by Tsmc and Foxconn (both operating in the People's Republic with large plants) of ten million Pfizer vaccines from the Chinese Fosun Pharma at the dawn of Taiwanese vaccination campaign.
Similarly, Western governments are beset by assessments of a geopolitical nature. Not only and not so much for the possible and inflated "wrath of Beijing" over anything related to Taiwan, but for the evaluation of Taipei as a potentially "geopolitically unstable" place, to use the words that Pat Gelsinger, CEO of Intel, had addressed to White House to convince her to limit sector incentives to US companies only. "Futile exercise," according to Morris Chang. This is a complicated game. Italy tries to enter it. Possibly he succeeds, but the ball has not been hit yet.
