Taiwan continues to dominate the semiconductor industry

Taiwanese companies continue to dominate the semiconductor industry. The company that generates the most headlines is TSMC, but there are also other less publicized companies, including UMC, Vanguard, and PSMC. Together, these companies account for 64% of the global foundry market.

The analysis comes from Trendforce (by Commercial Liaison). It illustrates Taiwan’s importance to the global semiconductor industry and the economy as a whole. Taiwanese companies have plans to build more factories in Taiwan, China and the United States, while many existing factories are expanding their capacity. Although more skilled humans are also needed.

What is particularly interesting is the dominance Taiwanese companies have when only considering advanced process production at 16nm or below. By 2022, they are expected to have a market share of up to 61%. Advanced nodes are highly profitable for companies like TSMC, as many of the world’s largest companies, including Apple, Nvidia, AMD, and Qualcomm, seek to gain competitive advantage using advanced nodes.

Trendforce estimates that Taiwan’s share of advanced node production will only decline slightly to 58% by 2025. That’s not a huge drop considering Intel is on a capital spending spree because it seeks to reconquer technological leadership.

It’s not all about Taiwan-based production. Taiwanese companies continue to expand locally, with six new factories under construction, while there are also four under construction in China and another three in the United States.

The continued dominance of Taiwanese companies brings some headaches for other companies and governments. In the US, politicians and corporate CEOs continue to push for the passage of the CHIPS lawwhich aims to protect the US from future geopolitical shocks, which continue to loom over Taiwan in particular.

Other countries are also looking to restore domestic manufacturing, with planning for manufacturing facilities underway. But it’s not like flipping a switch. It takes many years to get from the planning stages to product shipping, so Taiwan’s manufacturing dominance is expected to continue for a few more years.

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