Taiwan making better use of U.S.-China rivalry in semiconductor industry
TSMC’s 3-nm process initiation ceremony is scheduled for Dec. 29 in Taiwan. The world’s largest foundry recently announced that it would build a 2-nm plant in Hsinchu, and it would be put into operation in 2025. The ceremony and the announcement are to confirm that it will not reduce its business in Taiwan.
Outside Taiwan, TSMC is planning to invest US$40 billion in Arizona. The planned investment increased from US$12 billion on Dec. 6. It is going to make new investments in Japan and Germany at the same time. Taiwan’s share in the U.S. semiconductor market has jumped from 9.7 percent to 17.4 percent since 2018, led by TSMC’s aggressive investment.
Vietnam’s share, in the meantime, has more than tripled from 2.6 percent to 9.1 percent. Intel, which is running assembly and testing facilities in Vietnam by investing US$1 billion, increased its investment in the country by 50 percent last year. According to industry sources, the semiconductor sector of Vietnam is expected to show an average annual growth of 19 percent from 2020 to 2024.
Taiwan and Vietnam are making use of U.S.-China rivalry in the industry, while South Korea is failing to do so. From 2018 to 2021, South Korea’s share in the U.S. semiconductor market edged up from 11.2 percent to 13.2 percent while Taiwan, Vietnam and Malaysia raised theirs by 7.7, 6.4 and 2.5 percentage points, respectively. China’s share dropped from 30.1 percent to 11 percent in that period.
In 2021, South Korea’s non-memory chip exports to China accounted for 32.5 percent of its non-memory chip exports. China’s ratio amounted to 43.6 percent, 54.6 percent and 44.7 percent when it comes to memory chips, semiconductor equipment and materials, respectively. According to the Korea International Trade Association, South Korean semiconductor manufacturers have to enhance their competitiveness in the U.S. market, which accounts for 21.6 percent of the global semiconductor demand, in order to reduce their reliance on China and stabilize their client base.
The association pointed out that R&D investment has to be boosted and dependence on imported materials and equipment has to be reduced to that end. Last year, South Korea’s R&D investment-to-sales ratio in the industry stood at 8.1 percent whereas those of the United States, China, Japan and Taiwan were 16.9 percent, 12.7 percent, 11.5 percent and 11.3 percent, respectively. BusinessKorea
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