Taiwan's hosting of the world's most advanced process production foundries gives the island a strategic edge in its relations with China, a market analyst said Wednesday.
Ray Yang (???), a supervisor at the Industrial Technology Research Institute's Industrial Economics and Knowledge Center, said that Taiwan -- led by Taiwan Semiconductor Manufacturing Corp. (TSMC), which produces its current 7-, 5- and future 3-, 2- nanometer process nodes at home -- could use its crucial role in global technological development to act as the country's "patron."
Underlining this was the fact TSMC, the world's largest contract chipmaker, is a direct or indirect business partner with market giants such as Apple, Google, Microsoft, Qualcomm, and NVIDIA, Yang added.
Yang's comments came after U.S. Secretary of State Antony Blinken on Tuesday highlighted the importance of Taiwan's chip sector in helping the U.S. maintain a technology edge over China amid concerns over the U.S.' commitment to Taiwan and the region.
At a hearing of the U.S. Senate Foreign Relations Committee, senators quizzed Blinken about whether the U.S. would help Taiwan if attacked by China, especially given Taiwan's importance in the global semiconductor industry.
Blinken responded by saying the U.S. had a significant advantage over China in the ability to produce the highest-end semiconductors and noted that a few countries, including Taiwan, were critical of that.
He also said the U.S. was determined to make sure that Taiwan "has all necessary means to defend itself against any potential aggression, including unilateral action by China to disrupt the status quo" that has been in place for many decades.
According to Taipei-based market information advisory firm TrendForce Corp., Taiwan will account for approximately 48 percent of global 12-inch equivalent wafer foundry production capacity in 2022, while the market share of advanced processes below 16 nanometers is forecast to sit as high as 61 percent.
However, as Taiwanese foundries have announced plans to build fabs in the U.S., Japan, and Singapore, and foundries in several countries are also actively expanding production, Taiwan's market share of foundry capacity will drop slightly in 2025, according to TrendForce.
TrendForce estimates that the market share held by Taiwan's local foundry capacity will drop to 44 percent in 2025, of which the market share of advanced manufacturing processes will be approximately 58 percent.
But Taiwan is likely to continue its dominance of the global semiconductor industry because it has advantages in talent, geological convenience, and industrial enclaves, the firm said.
It means Taiwanese foundries will still tend to focus on Taiwan for research and development, as well as production expansion, it added.
Source: Focus Taiwan News Channel