Pat Gelsinger doubts TSMC’s US investments: No chip leadership without technology transfer

Former Intel CEO Pat Gelsinger has spoken out again – this time with clear skepticism about the expansion plans of Taiwanese contract manufacturer TSMC in the USA. According to a report in the Financial Times, Gelsinger is of the opinion that even multi-billion dollar investments in US chip factories will not lead to a real leadership role for the USA in the semiconductor industry as long as research and development remains concentrated in Taiwan.

Billions without power? Gelsinger sees lack of technology transfer as the main problem

Specifically, Gelsinger is referring to TSMC’s announcement to invest more than 100 billion US dollars in new production sites in the USA – particularly in Arizona. This primarily involves the construction of new foundries for 4 nm and 3 nm production. For Gelsinger, however, this is only part of the overall picture. The actual technological sovereignty does not lie in physical production, but in intellectual property – in other words, in the development of the underlying technologies. He puts it soberly in a nutshell: “If you don’t design the next generation of transistors in the USA, then you won’t have a leading role there.” And he continues: “Without R&D in the USA, there will be no technological leadership.”

R&D remains in Taiwan – politically and strategically intentional

Gelsinger is particularly critical of the fact that TSMC continues to concentrate all of its research and development in Taiwan. This is no coincidence, but a strategic decision – politically supported by the Taiwanese government, which has so far categorically rejected the outsourcing of key technologies abroad. For the USA, this means that they will have state-of-the-art production facilities, but without the know-how to develop them further. However, TSMC has already positioned itself on this point. Official announcements have repeatedly referred to the establishment of a new R&D center in the USA. This is a planned facility in the immediate vicinity of Fab 21 in Arizona, which will focus on process optimization and potentially also the development of future production stages. However, the extent to which basic research will actually be carried out there – and whether this is comparable to the scale of Taiwanese laboratories – remains questionable.

USA as a production location: “Better than nothing”?

Gelsinger admits that the Trump administration’s protectionist measures – specifically the import tariffs on Chinese electronic products – have had at least a partial effect. Companies such as TSMC and Samsung have been motivated by the changed framework conditions to set up plants in the USA. However, whether this will result in sustainable structural change is another matter. According to Gelsinger, the fact that the USA has historically never been a strong manufacturing location for state-of-the-art chips – neither in terms of scaling production nor its efficiency – is critical. The know-how is in Asia – and that’s where it will remain for the time being.

Geopolitics as a driver – but not as a solution

In the background of all these developments is the fragile geopolitical situation in East Asia. The growing pressure between China and Taiwan is making Western countries nervous – especially in view of the enormous dependence on TSMC. Gelsinger sees this pressure as an opportunity for the USA to regain lost ground – but only if technological expertise is also restored. He criticizes not only the Asian strategies, but also the political and industrial naivety in the USA. Anyone who believes that they can win back the sceptre with pure manufacturing is overlooking the actual value chains. Without access to high-end research, the US semiconductor industry will remain a downstream player.

Conclusion: TSMC invests, but the power remains in Taiwan for the time being

Even if TSMC refers to progress in the USA in public statements, Gelsinger’s skepticism is not entirely unfounded. An R&D center may be established in Arizona, but the actual scope and influence on the global technology strategy remains to be seen. The decisive factor will be whether TSMC is prepared to bring more than just machines, but also know-how across the Pacific in the coming years. Until then, technological sovereignty will remain in East Asia. And the USA – despite billions invested – will remain a production location with ambitions for the time being.

Source: The Financial Times