There is a big blind spot for Taiwan and all other countries dishing out CHIPS Act subsidies only to advanced-node semiconductor manufacturing capacities: innovations on mature nodes, which are used to produce chips in everyday applications to enable our transportation infrastructure, building temperature controls, automotive controls, and more, continue to receive huge investment in China without limitations.
While the media talk about the possibility of a future surplus in the mature node space, the lack of investment in mature-node innovations outside China may have consequences as China is forced to focus on mature nodes and pour all resources into innovation and production leadership.
A Taiwanese semiconductor veteran recently shed light on this blind spot and called for academic efforts in the seemingly "mundane" but genuinely important task of continuous innovation on mature nodes.
Cheng-Wen Wu, President of Southern Taiwan University of Science and Technology (NTUST), also a retired distinguished chair professor from the Department of Electrical Engineering at National Tsinghua University, recently said at the event of Macronix Golden Silicon Award presentation that Taiwan is already a world leader in IC manufacturing and IC design, "so perhaps we should look farther ahead and make design projects that contribute more to the well-being of mankind, such as how to use IC design to reduce the excessive use of earth's resources by mankind in an extreme climate, instead of comparing who has the prettier numbers."
Wu pointed out Taiwan's IC manufacturing foundry is very successful, but in the cultivation of talents, one should not be limited to the foundry level. He said Taiwan should not put all its talents just in the pursuit of specifications, only to make the chips, because systems are even more important.
"Is it true that there is no way to innovate and do forward-looking applications for mature processes? Obviously not," Wu said. "Taiwan should not be under the illusion that it can only rely on forward-looking processes to win the competition. In fact, there are many innovations and applications in mature processes."
It is also noteworthy that as the US, along with its allies, escalates its restrictions on semiconductor exports to China, particularly on advanced node equipment and AI chips; but beyond that, it still has to fundamentally address China's ambitions of self-sufficiency in semiconductor supply chains. If China one day supplies its own mature node chips and even exports them to other countries, it will be a big challenge to the US and other market leaders.
A Beijing-based semiconductor venture capitalist who focuses on hardware technology and spends most of his time visiting semiconductor start-ups was quoted by SCMP saying that whether it is the sanction imposed by Japan or the US, and whether sanctions are early or late, the challenge reaffirms China's need for local substitution and the importance of investing in it.
China's semiconductor industry remains a major investment target despite the threat of the US continuing to tighten semiconductor export restrictions. At the 2023 World Semiconductor Congress, one industry source claimed that China has moved into a deeper stage of semiconductor self-sufficiency, which would not have happened without US pressure.
