C C Wei wishes Elon “Good Luck” with TeraFab

Speaking at the TSMC AGM yesterday, Wei said: “”In the past 30 to 40 years, we always faced all kinds of competition and we are not afraid of competition. In the past, I think we won, and I believe we will continue to win.”

On Intel, which is struggling to compete in the foundry business, Wei said: “Now Intel is still one of our top 10 customers. We want to earn money from them and also would continue to protect our own intellectual properties and trade secrets.”

The latter remark probably is acreference to litigation over trade secrets and non-compete agreements concerning former TSMC svp Wei-Jen Lo who was recruited by Intel.

Wei expressed concern over the hike in component prices which has hit the PC and smartphone as well as other markets.

“We won’t raise prices like memory chips –  all of a sudden 400% hikes in the short term,” said Wei, “although I do envy their 80% gross margins, we won’t do that. That’s not realistic. We really think customer trust and sustainability is more important.”

Asked about the sustainability of the AI boom, Wei replied: “”Our customers and our customers’ customers who are mainly cloud service providers continue to give us positive outlooks, so thus we are keeping the faith that AI mega trend will last for multiple years.”

TSMC is investing $165 billion in Arizona, said Wei, but its earlier intention of putting 30% of its 2nm production there is being hit by difficulties in getting environmental permits and skilled workers.

On using ASML’s latest $400 million high-NA machines, Wei said: “We do not currently need it for production because the cost is still somewhat high. We will continue working to lower the cost and maximise its benefits and once the economics make sense, we will bring it into production.”

On TSMC’s approach to profit-sharing with employees, Wei said: “Employee profit sharing increased by about 30% from 2023 to 2024 and again by about 30% from 2024 to 2025,” W “We are confident it will rise by another 30% in 2026.”