TSMC Chairman’s Unexpected Exit Sparks Speculation Amidst Fab 21 Setbacks

Sudden Retirement Raises Questions

In a surprising turn of events on December 19, Taiwan Semiconductor Manufacturing Company (TSMC) announced the abrupt retirement of its chairman, Mark Liu. After leading the company for a substantial five-year tenure, Liu’s unexpected departure has triggered widespread speculation within industry circles, with insiders questioning the nature of his exit and hinting that it may not have been a voluntary decision.

Fab 21 Construction Woes Linked to Liu’s Departure

Speculation about a possible connection between Liu’s retirement and the persistent construction delays at TSMC’s Fab 21 in Arizona is rife in Taiwanese media. Throughout 2023, Liu dedicated considerable efforts to address and resolve issues surrounding the construction timeline of the facility, making the connection between his departure and the Arizona fab’s challenges a focal point of industry discussions.

Challenges at Fab 21 and Local Strain

The immediate catalyst for Liu’s removal, as per industry speculation, seems to stem from the ongoing challenges faced by Fab 21. The construction of the Arizona fab, which commenced in April 2021, encountered persistent setbacks, leading Liu to attribute the delays to local workers in Arizona. In an effort to expedite progress, experienced TSMC staff from Taiwan were sent, a decision that stirred controversy and strained relations with local workers and unions. After a protracted six-month conflict, Liu retracted his criticism of American workers and made concessions to mend relations.

Chang’s Influence and Doubts Over U.S. Collaboration

Reports indicate that Mark Liu’s position within TSMC was already precarious due to the disapproval of TSMC founder Morris Chang regarding collaboration with the United States. Despite formally stepping down from his role in 2018, Chang’s influence still resonates within the company. Chang expressed skepticism towards initiatives like the CHIPS Act and the establishment of new semiconductor fabs in the U.S., a viewpoint that may have cast a shadow on Liu’s leadership. Speculations abound that Liu’s support for TSMC-U.S. cooperation may have played a role in his ouster, with the Fab 21 setbacks serving as the tipping point.

Succession Plans and Challenges for TSMC’s New Leadership

In the wake of Liu’s retirement announcement, the TSMC board of directors has recommended the elevation of current CEO C.C. Wei to the position of chairman. Should this proposal be approved, it would mark a departure from the dual-role arrangement implemented after Morris Chang’s retirement. However, uncertainties linger regarding whether Wei will retain both positions or step down as CEO upon assuming the chairmanship.

Wei’s Balancing Act and Federal Subsidy Challenges

Should C.C. Wei assume the chairmanship, he faces the formidable task of navigating TSMC through turbulent waters. The company has invested substantial amounts into Fab 21 and broader initiatives aimed at revitalizing semiconductor manufacturing in the U.S. However, TSMC is still awaiting anticipated subsidies from the federal government, a situation that is believed to have contributed to Liu’s departure. Wei’s ability to adeptly address these challenges and get ambitious projects back on track will likely be a decisive factor in determining the success of his leadership, with potential consequences looming should he encounter difficulties.