Massive investments in semiconductor manufacturing . . .
Amid the COVID-19 pandemic, the global supply capacity of semiconductor manufacturing in Asia suffered while demand increased. In response, China and Taiwan have dramatically boosted investments in chip manufacturing, with Japan and South Korea also looking to benefit. The Taiwan Semiconductor Manufacturing Company plans to set up its first factory in Japan, which aligns with Japanese Prime Minister Yoshihide Suga’s agenda of prioritizing semiconductor manufacturing to expand domestic supply chains. Meanwhile, the South Korean government has incentivized competition across companies to invest in its semiconductor industry by providing tax benefits. As a result, companies in Korea plan to invest around C$557 billion into their semiconductor industry.
Shortage of semiconductors . . .
Semiconductors are a vital component used in almost all electronic devices, from mobile phones to cars. Demand has soared during the pandemic with the growth of 5G devices, smart vehicles, and appliances. However, semiconductor industries faced disruption from trade wars, supply chain problems, and even a factory fire that destroyed a major auto industry chip supplier in Japan in March. Some experts now worry that the increased investment in microchip fabrication plants could lead to an oversupply of semiconductors and their components.
Global competition for semiconductors manufacturing . . .
While Taiwan is set to increase its share of global chip manufacturing revenue from 63 per cent to 65 per cent and South Korea is set to maintain its 18 per cent share from 2020 to 2021, China’s share could fall from six to five per cent. Amidst the U.S.-China tech war, China’s ability to produce advanced chips has been hampered by the U.S. export block of U.S.-origin technologies to China. Meanwhile, the U.S.’ third-largest contract semiconductor manufacturer, GlobalFoundries, recently invested C$5 billion to build a new production factory in Singapore. Mary Ng, Canada’s Minister of Small Business, Export Promotion and International Trade, is working to increase opportunities for Canada and the U.S. to collaborate in this industry.
- Consultancy.asia: Global chip and semiconductor industry heavily reliant on Asia
- Fortune: U.S. chipmaker invests $4 billion in Singapore, even as Congress tries to lure manufacturers home
- South China Morning Post: Mainland China and Taiwan propel semiconductor investment frenzy as Singapore and Japan join the game