Skip to main content

Taiwan predicts its chip industry will weather global shortage

Cropped image of an engineer holding computer microchip on the foreground
Image Credit: Shutterstock

Join us in Atlanta on April 10th and explore the landscape of security workforce. We will explore the vision, benefits, and use cases of AI for security teams. Request an invite here.


(Reuters) — Taiwan’s key semiconductor industry has years of growth ahead of it with no worries about oversupply despite a massive capital investment program and only a few competitors in the next decade or so, a senior government minister said on Friday.

Kung Ming-hsin, the head of Taiwan’s economic planning agency, the National Development Council, told Reuters the business opportunities presented by the global transformation to a digital economy were “very, very enormous”.

Kung also sits on the board of Taiwan Semiconductor Manufacturing Co as a representative of the largest shareholder, the government’s National Development Fund, which holds around 6% of the stock of the world’s most valuable semiconductor company.

He said between now and 2025, Taiwan companies have planned more than T$3 trillion ($107 billion) in investment in the semiconductor sector, citing expansion plans from chip giants including TSMC and Powerchip Semiconductor Manufacturing.

VB Event

The AI Impact Tour – Atlanta

Continuing our tour, we’re headed to Atlanta for the AI Impact Tour stop on April 10th. This exclusive, invite-only event, in partnership with Microsoft, will feature discussions on how generative AI is transforming the security workforce. Space is limited, so request an invite today.
Request an invite

“Once they are built, Taiwan’s competitors in semiconductors in the next decade will be very few,” Kung said in an interview in his office building, which overlooks the presidential office.

Taiwan’s semiconductor firms are ramping up production to tackle a global chip shortage, which has affected everything from carmakers to consumer products, and meet booming demand following the work-from-home trend during the COVID-19 pandemic.

Soaring demand is set to continue, driven by 5G, artificial intelligence and electric vehicles, Kung said.

“In the next decade or even longer there won’t be oversupply for semiconductors,” he added, when asked if the massive investment plans could have a downside.

Taiwan is currently in the grip of its worst drought in more than half a century, but Kung said the impact on chip firms was limited at present, citing the amount of water they are able to recycle and the location of their main factories in Hsinchu in northern Taiwan, and in the island’s south.

“These two places are okay at the moment. So the impact on semiconductors is not bad.”

Still, Taiwan does face other challenges, not least from China where President Xi Jinping has made semiconductors a strategic priority.

Kung named Samsung Electronics as Taiwan’s most serious competitor and also able to match TSMC’s advanced chipmaking, but said U.S. tech restrictions had for now blunted the Chinese threat.

Intel — both a TSMC client and competitor — last month announced a $20 billion plan to expand its advanced chip making capacity.

Kung said there was perhaps room for TSMC to cooperate with Intel, but “what’s important is really how you upgrade yourself”.

To that end, the government is helping the industry develop the next generation of semiconductor manufacturing technology like 1 nanometre and beyond with funding support and talent recruitment programmes in the works, he added.

($1 = 28.1070 Taiwan dollars)

VB Daily - get the latest in your inbox

Thanks for subscribing. Check out more VB newsletters here.

An error occured.