AI Leverages Taiwan：Why Huang, Su, and Gelsinger Laud TSMC's Importance
United Daily News, June 5, 2024
Global Tech Industry Converges on Taiwan for Major June 4 Events
On June 4, the global tech industry spotlight focused on Taiwan, marking two significant events: the annual Taipei International Computer Show and the Taiwan Semiconductor Manufacturing Company’s (TSMC) shareholders meeting. These events are deeply interconnected. NVIDIA founder Jensen Huang, who has become known as the "Godfather of AI," Advanced Micro Devices (AMD) CEO Lisa Su, and Intel CEO Pat Gelsinger all emphasized their reliance on and close ties with TSMC.
This underscores a pivotal moment in the tech industry this year. Compared to Huang's Taiwan visit last year, when he attended the Taipei International Computer Show, and included events like delivering a keynote speech, visiting night markets, and touring supplier booths in his itinerary, it ended up creating a "Huang Frenzy." Compared with Su’s visit this year, she kicked off the event by giving the first keynote speech on June 3. She not only appeared on programs for interviews but also toured the computer show on June 4, visiting various original equipment manufacturers (OEMs) and brand manufacturers such as Quanta, Wistron, Gigabyte, Foxconn, ASrock, Inventec, Delta, MSI, and MediaTek. Both Huang and Su's appearances generated significant excitement, with Huang experiencing a full day of "lined streets, crowd entourages, and enthusiastic applause."
In contrast, Gelsinger, who was previously criticized by TSMC founder Morris Chang for his "unfriendly attitude," has softened his stance in recent years. Last year, he visited Taiwan twice to solidify the supply chain, and this year, he greeted the audience in Chinese with "Hello everyone" upon his arrival. Gelsinger emphasized that Intel's presence in Taiwan dates back to 1985, marking nearly 40 years by next year. He expressed his admiration for Taiwan's role in the global tech ecosystem, highlighting the innovative energy he felt within Taiwan's tech community.
Jeffrey Huang: Taiwan is a Key Player in the AI Boom
Chairman Shuang-Lang (Paul) Peng of the Taipei Computer Association, noted that this year's COMPUTEX centers around "Connecting AI: Creating the Future Together," focusing on generative AI technology development. The event covers six major themes: AI computing, advanced communications, future mobility, immersive realities, green energy sustainability, and innovation. This year features an unprecedented number of tech industry executives delivering keynote speeches.
Chairman James Huang of the Taiwan External Trade Development Council (TAITRA) highlighted the significance of the event by displaying photos of nine international AI industry leaders attending this year. He emphasized, "We are now in an era of a technological and AI Big Bang." He asserted that Taiwan plays a critical role in this AI explosion.
Quanta Chairman Barry Lam recently stated that future competitiveness and emerging trends will rely on AI execution, hence "AI power is national power." President Lai Ching-te declared the ambition to turn Taiwan into an "AI Smart Island," which has reignited discussions on the implications for Taiwanese manufacturers in the AI era, including geopolitical issues, utilities, talent, and investment risks in Taiwan.
The significance of Taiwan's role is further underscored by questions from South Korean reporters at the event, including inquiries about Huang's potential visit to South Korea. South Korean media have expressed concerns over the nation's AI semiconductor industry lagging in design, manufacturing, and packaging. They worry that the strengthening collaboration among the United States, Taiwan, and Japan might marginalize South Korea in the global AI semiconductor competition.
Why has Taiwan suddenly become so crucial that industry giants like Jensen Huang, Lisa Su, and Pat Gelsinger are making the trip, undeterred by rising geopolitical tensions and recent military drills by China?
Three Industry Giants Rely on TSMC's Advanced Manufacturing Processes and Capacity
Securing support from TSMC is a critical factor. Huang, Su, and Gelsinger reiterated Taiwan's importance yesterday. Huang praised TSMC as "so good" and "incredible," highlighting its advanced technology, professional talent, and exceptional teams. Gelsinger thanked TSMC for its assistance in developing the new-generation AI PC processor, Lunar Lake. Su, while more cautious, consistently emphasized TSMC as a powerful partner with a close and ongoing relationship, including discussions about 3nm process orders.
During TSMC's shareholder meeting yesterday, Chairman C. C. Wei faced direct media questions about the potential relocation of production to the United States in the event of cross-strait conflict. Wei acknowledged such discussions have taken place but stated that moving everything out is impossible.
Wei affirmed that TSMC prioritizes Taiwan for expansion, with the most advanced processes always starting in Taiwan before spreading elsewhere. He noted that 80-90% of TSMC's capacity is in Taiwan, making a complete relocation unfeasible. TSMC's strategy remains to establish a strong base in Taiwan while looking globally. Despite the instability of cross-strait relations posing a significant challenge to supply chain resilience, TSMC does not wish for war to occur.
At COMPUTEX Taipei, Huang announced continued investment in Taiwan, including the establishment of a new R&D center. He was also asked by foreign media about the political crisis. In response to whether he was concerned about current regional tensions or confident in Taiwan's leadership in global technology, Huang emphasized NVIDIA's long-standing collaboration with Taiwanese tech firms and engineers for over 30 years. He highlighted the abundance of great engineering and technology, and numerous partnerships, stating, "We will continue to do so," and "We are investing in Taiwan."
Huang noted that Taiwan's unique ecosystem, from chip manufacturing to computer assembly, makes it an indispensable partner for NVIDIA. He expressed gratitude for the support from many assembly plants such as Foxconn, ASUS, MSI, Quanta, Wistron, and Delta. He concluded that Taiwan's tech industry boasts a rich ecosystem, and TSMC's advanced technology, work ethic, and exceptional flexibility make it irreplaceable.
Foreign Investors: Huang, Su, and Gelsinger Compete for TSMC's Esteem and Capacity
Foreign investors disclose that the high regard shown by Huang, Su, and Gelsinger towards TSMC is not only due to TSMC's leading technology but also largely driven by the competition for production capacity. Last month, TSMC Chairman C. C. Wei mentioned at an earnings call that the demand for CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging is "very, very strong." While TSMC is striving to meet this demand, it can only satisfy a portion of its customers' needs.
The praise for TSMC's technological leadership coincides with the critical competition between Huang and Su for TSMC's manufacturing capacity.
AI Server Manufacturing Capacity Under Pressure: "Too Many Projects to Handle"
Another driving factor is the increasing demand for AI server manufacturing capacity in the AI era, which is also under significant pressure. This has turned Quanta Chairman Barry Lam, who claims to have pioneered AI servers, into a prominent figure. He confidently stated that the influx of AI orders has tightened the supply chain and expanded the future application market. He even hinted at delaying his retirement because "it's too much fun to retire too early."
General Manager Mike Yang of Quanta Cloud Technology revealed to reporters that Quanta Cloud Technology is expanding every factory to meet the massive AI demand, but there are still too many projects to handle. Last week, Yang mentioned that many orders extend into 2025. To cope with this, Quanta is vigorously expanding its factories and recruiting engineers. The R&D staff in the server division has reached about 2,000 people, but they are still actively hiring.