The geopolitical bickering between the US and China will lead to further price increases in the chip industry, predicts TSMC founder Morris Chang.

Chang, 91, may have been retired for a few years, but he hasn’t lost his sharp mind and tongue. Chang was a guest at an event in the Taiwanese capital, Taipei, where he unhesitatingly declared globalization dead. Free trade in chip technology would also die in the struggle between the United States and China.

According to Chang, the geopolitical conflict will create a rift in the global technology chain. This could make chip technology procurement more difficult in the future, which in turn will drive up chip prices. It remains to be seen how far the TSMC founder’s forecasts will prove to be true, but higher chip prices will hit every company’s wallet.

However, Chang is not alone in this opinion. Peter Wennink, CEO of Dutch company ASML, also believes that geopolitical bloc formation between the United States and China will lead to “less effective and more expensive innovations”.

Between two fires

Nonetheless, Chang has expressed his support for Washington’s actions. TSMC, willingly or not, finds itself in the middle of this political tug of war. Taiwan is a leading market in semiconductor manufacturing and TSMC is a crucial link in the global chip chain.

According to Chang, the Chinese tech industry is five to six years behind Taiwan and he wants it to stay that way. Robert O’Brien, a former defense adviser to Trump, recently remarked that should the conflict ever escalate militarily, he would “rather watch TSMC’s factories burn” than see them in Chinese hands.

TSMC is trying to get out of this geopolitical entanglement by building new factories outside of Taiwan. The company is said to be targeting websites in the United States, Japan and Germany, among others. The construction plans in Germany even seem to be very concrete, only subsidies have to be negotiated. That, in turn, is a good thing for the European Union, which would like to play a bigger role in the chip industry.