Taiwan Semiconductor Founder Highlights How US Sanctions Pose A Double Whammy In Form Of Rising Costs, Chip Availability - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Company Ltd TSM retired founder Morris Chang flagged higher costs and reduction in the omnipresence of vital chips associated with U.S. technology sanctions on China.
"When the costs go up, the pervasiveness of chips will either stop or slow down considerably," said Chang at an event, Reuters reports.
The report adds that China has, in recent years, ramped up diplomatic and military pressure against Taiwan, which Beijing views as its territory, raising concerns about the fate of the chip fabs that dot Taiwan's western coast, accounting for the majority of the most advanced chips.
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U.S. efforts to boost chip manufacturing stateside or allied countries present a dilemma for Taiwan.
TSMC is expanding its global production footprint, even as it restricts its most advanced technology in Taiwan.
In 2022, TSMC started constructing a second chip factory in Arizona worth $40 billion, likely to start production in 2026, using advanced 3 nm technology.
The report adds that the Chinese government is also plowing billions into bolstering its chip sector, but Chang said China's chip manufacturing technology lags that of Taiwan by "at least five or six years."
TSMC is also in advanced discussion with the German state of Saxony about building a new factory. The parties focused on government subsidies to support the investment.
Given the higher costs associated with building in Germany, including labor, TSMC has been discussing subsidies it could get in return for building the factory, Reuters reports.
In 2022, the European Union launched the European Chips Act to ease government funding rules for semiconductor plants.
TSMC's German factory will likely produce less advanced chips, especially those used in the auto industry.
Price Action: TSM shares traded higher by 1.91% at $87.90 on the last check Thursday.
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