Mainland Chinese IT consultant ‘shows ignorance’ by opposing TSMC expansion plan

Published (HKT): 2021.05.04 05:30

An information technology consultant to the Chinese government has come under criticism for showing his ignorance of his own industry, after he opposed plans by Taiwanese chipmaker TSMC to expand its production on the mainland.

Consultant Xiang Ligang, who works with China’s Ministry of Industry and Information Technology, issued his warning after Taiwan Semiconductor Manufacturing Co, the world’s top chipmaker, announced late last month that it would spend US$2.8 billion to expand its plant in Nanjing, Jiangsu province.

Xiang warned that TSMC’s expansion would destroy mainland China’s homegrown chip-making industry. Writing on the Sina Finance news website, Xiang said TSMC’s significant market edge would cripple its mainland rivals.

TSMC plans to use its expanded Nanjing plant to increase its production of 28-nanometer node chips, which lag at least two generations behind the company’s advanced 5-nm node chips.

Xiang claimed TSMC’s technological edge would allow it to mass-produce its low-end products and sell them cheaply, threatening the survival of mainland manufacturers.

His remarks sparked a heated online debate, with some mainlanders supporting him and calling for action to stop TSMC’s expansion.

Critics, however, said Xiang’s concerns were groundless and revealed his own ignorance about the industry.

The mainland tech news website icsmart.cn commented that TSMC does not pose a threat because it has different markets and customers from the only two mainland companies capable of producing 28 nm chips – SMIC and Shanghai Huahong Grace Semiconductor Manufacturing.

The website added that TSMC’s expansion in Nanjing could help to nurture the mainland’s production talent.

Besides, if competition did exist, the mainland firms could not avoid it since TSMC could expand its production in other countries such as Japan, the United States and in Europe, the website said.

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