Monday, April 25th 2022

Localization of Chip Manufacturing Rising; Taiwan to Control 48% of Global Foundry Capacity in 2022, Says TrendForce

According to TrendForce, Taiwan is crucial to the global semiconductor supply chain, accounting for a 26% market share of semiconductor revenue in 2021, ranking second in the world. Its IC design and packaging & testing industries also account for a 27% and 20% global market share, ranking second and first in the world, respectively. Firmly in the pole position, Taiwan accounts for 64% of the foundry market. In addition to TSMC possessing the most advanced process technology at this stage, foundries including UMC, Vanguard, and PSMC also have their own process advantages. Under the looming shadow of chip shortages caused by the pandemic and geopolitical turmoil in the past two years, various governments have quickly awakened to the fact that localization of chip manufacturing is necessary to avoid being cut off from chip acquisition due to logistics difficulties or cross-border shipment bans. Taiwanese companies have ridden this wave to become partners that governments around the world are eager to invite to set up factories in various locales.
Currently, 8-inch and 12-inch foundries are dominated by 24 fabs in Taiwan, followed by China, South Korea, and the United States. Looking at new factories plans post 2021, Taiwan still accounts for the largest number of new fabs, including six new plants in progress, followed in activity by China and the United States, with plans for four and three new fabs, respectively. Due to the advantages and uniqueness of Taiwanese fabs in terms of advanced processes and certain special processes, they accepted invitations to set up plants in various countries, unlike non-Taiwanese foundries who largely still build fabs locally. Therefore, Taiwanese manufacturers have successively announced factory expansions at locations including the United States, China, Japan, and Singapore in addition to Taiwan in consideration of local client needs and technical cooperation.

The focus of Taiwan's key technologies and production expansion remains in Taiwan, accounting for 44% of global wafer production capacity by 2025
In 2022, Taiwan will account for approximately 48% of global 12-inch equivalent wafer foundry production capacity. Only looking at 12-inch wafer production capacity with more than 50% market share, the market share of advanced processes below 16nm (inclusive) will be as high as 61%. However, as Taiwanese manufacturers expand their production globally, TrendForce estimates that the market share held by Taiwan's local foundry capacity will drop slightly to 44% in 2025, of which the market share of 12-inch wafer capacity will fall to 47% and advanced manufacturing processes to approximately 58%. However, Taiwanese foundries' recent production expansion plans remain focused on Taiwan including TSMC's most advanced N3 and N2 nodes, while companies such as UMC, Vanguard, and PSMC retain several new factory projects in Hsinchu, Miaoli, and Tainan.

TrendForce believes, since Taiwanese foundries have announced plans to build fabs in China, the United States, Japan, and Singapore, and foundries in numerous countries are also actively expanding production, Taiwan's market share of foundry capacity will drop slightly in 2025. However, semiconductor enclaves do not come together quickly. The integrity of a supply chain relies on the synergy among upstream (raw materials, equipment, and wafers), midstream (IP design services, IC design, manufacturing, and packaging and testing), and downstream (brands and distributors) sectors. Taiwan has advantages in talent, geographical convenience and industrial enclaves. Therefore, Taiwanese foundries still tend to focus on Taiwan for R&D and production expansion. Looking at the existing blueprint for production expansion, Taiwan will still control 44% of the world's foundry capacity by 2025 and as much as 58% of the world's capacity for advanced processes, continuing its dominance of the global semiconductor industry.
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10 Comments on Localization of Chip Manufacturing Rising; Taiwan to Control 48% of Global Foundry Capacity in 2022, Says TrendForce

#1
Denver
How would the data with the capacity of intel in comparison?
Posted on Reply
#2
DeathtoGnomes
The 48% 'control' could be used as an invitation for political invasion from China, I cant speculate it will happen but the potential is there.
Posted on Reply
#3
Steevo
48% of don't worry about whats happening behind Taiwan, no need to build your own FABs, there is no reason to expect that aggregating power in one country and with one company will result in any sort of abuse of the system. Never happened before....
Posted on Reply
#4
onemanhitsquad

"Taiwan to Control 48%..."

I think they meant China
Posted on Reply
#5
Aquinus
Resident Wat-man
onemanhitsquad

"Taiwan to Control 48%..."

I think they meant China
Sure, if you're going to kowtow to the PRC.
Posted on Reply
#6
onemanhitsquad
AquinusSure, if you're going to kowtow to the PRC.
that was my point...Taiwan IS China in their eyes...that's why they are going to take...about 80% of the populations roots are from China...we will be hurting after the take over
Posted on Reply
#7
R-T-B
DeathtoGnomesThe 48% 'control' could be used as an invitation for political invasion from China, I cant speculate it will happen but the potential is there.
I appreciate you using restraint rather than "it will certainly happen" ala an armchair general as many here do.

You are correct of course, the potential is certainly there.
Posted on Reply
#8
dragontamer5788
DeathtoGnomesThe 48% 'control' could be used as an invitation for political invasion from China, I cant speculate it will happen but the potential is there.
On the one hand, yes, this makes Taiwan an incredibly valuable resource.

On the other hand, no. This makes Taiwan an incredibly valuable resource which the USA will more likely defend.

(Communist) China wants to take over Taiwan (aka: Kuomintang / Nationalist China, USA's ally during WW2) for political / cultural / historical reasons. I don't think USA's culture is strong enough to protect Taiwan / remnants of Kuomintang for historical/cultural reasons. Yes, they are our old allies and friends, but I feel like a lot of my fellow Americans have forgotten about the history from the 1940s through today. This is something our diplomats understand but not necessarily our citizens.

But USA understands MONEY, and semiconductors. The more semi-conductors Taiwan makes, the more USA will protect them.

----------

In this regards, I expect that if Taiwan's semiconductor share goes down, China is more likely to invade... because USA is less likely to defend.
Posted on Reply
#9
DeathtoGnomes
dragontamer5788feel like a lot of my fellow Americans have forgotten about the history from the 1940s through today
Its not that we/they forgot, attention changed with its induction into Communist party. That lead to flat ignoring the pink elephant
Posted on Reply
#10
dragontamer5788
DeathtoGnomesIts not that we/they forgot, attention changed with its induction into Communist party. That lead to flat ignoring the pink elephant
The communists began to rise to power in 1920s. The 2nd Sino-Japanese war put a pause on the Communist vs Kuomintang battles. In general, Japan destroyed more Kuomintang territory during Sino-Japanese war and WW2. So the Communists had a severe advantage in the mid-1940s. Then Kuomintang retreated into the Taiwan island and renamed itself Taiwan (from "Republic of China") when the civil war was lost.

The Kuomintang have always been US-allies. 100 years ago, 50 years ago, and today as Taiwan. For a good number of decades, it was the USA's stance that Taiwan was the rightful ruler of China, though their resounding defeat on the Chinese mainland prevents anybody from really proclaiming this today. There's a reason why Taiwan still flies the old 1930s-era Chinese flag. Because they're functionally the same government as the 1930s China... just with less... mainland China.

In any case, the island of Taiwan is obviously a Chinese territory. Taiwan itself could be seen as the loser to the civil war, except Taiwan has always been in control of the Kuomintang / Republic of China forces (not to be confused with the Communist Republic of China)
Posted on Reply
Jun 26th, 2022 00:16 EDT change timezone

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