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How is Taiwan holding strong in the global chip race?

Vyra Wu, DIGITIMES Asia, Taipei 0

Credit: DIGITIMES

Taiwan's semiconductor foundry industry has solidified its position as an indispensable player in the global semiconductor supply chain.

This week, experts from industry, government, and academia convened at the annual forum hosted by the National Science and Technology Council's Center for Science, Technology, and Society (DSET) to discuss "Taiwan's Semiconductor Industry and Economic Security in the Context of Tech Geopolitics." The forum explored how Taiwan can navigate the rapidly evolving geopolitical landscape and leverage its strengths to meet emerging challenges.

Emphasizing that since 2018, nations have increasingly integrated economic security into their defense, foreign, and trade policies, Jeremy Chih-Cheng Chang, the Research Fellow and Director of the Semiconductor Industrial Policy Research Unit at DSET, highlighted the importance of Taiwan protecting its technological assets amidst a global surge in subsidy wars. He stressed that ensuring companies retain their commercial interests and prevent technological leaks is essential for maintaining Taiwan's reputation as a reliable and trustworthy partner on the international stage.

Addressing the collaboration between the government and industry, Terry Tsao, Chief Marketing Officer and President of Taiwan at SEMI, noted that Taiwan's strength lies in its manufacturing capacity. He argued for a narrative that positions Taiwan as an essential and trustworthy partner in the global supply chain, cautioning against over-reliance on large-scale manufacturing and excessive subsidies, which could lead to inefficiencies.

He proposed a multi-faceted approach: globally voicing Taiwan's strategic narrative, enhancing local resilience to benefit Taiwan's industry during supply chain reconfigurations, and promoting Taiwan's indispensable role. Tsao also stressed the need for a comprehensive international strategy and suggested that think tanks could aid in developing cohesive policies.

Furthermore, Tsao acknowledged the industry's call for a unified national semiconductor strategy, which the government has recognized. He suggested starting with simpler issues and progressively tackling more complex ones; addressing domestic challenges first, such as talent shortages, and then focusing on external communications—identifying who should convey Taiwan's strategic narrative and what that narrative should be, whether it be the government, industry, associations, or think tanks.

Tsao also recommended optimizing the current strategy by establishing a dedicated unit to drive and monitor progress, as there is consensus on the semiconductor strategy. Stakeholders are often preoccupied with their primary responsibilities, leading to a lack of coordinated effort.

Ray Yang, Consulting Director at the Industry, Science and Technology International Strategy Center of ITRI, projected that Taiwan's semiconductor industry could maintain its global leadership for the next 8 to 10 years. However, he warned that Taiwan must collaborate internationally and incorporate security mechanisms into its semiconductor ecosystem.

Yang pointed out that while Taiwan's industry is currently robust, it must focus on research security to prepare for the next generation of semiconductor technology. Yang notes that the country must counter China's attempts to surpass it through substantial investments.

Kristy Hsu, Director of the Taiwan ASEAN Studies Center at the Chung-Hua Institution of Economic Research, discussed the necessity of long-term policy consistency for countries developing their semiconductor sectors. She highlighted the importance of aligning with nations with compatible political systems and considering infrastructure and regulatory conditions.

Hsu suggested that Taiwan's approach to "friend-shoring" should involve strategic guidance at the national level, integrating cross-sector national strategies with medium- to long-term planning. She also noted that while major Taiwanese semiconductor firms can secure subsidies from host countries, smaller suppliers may need government support due to their limited capital, international experience, and talent mobility.

The DSET forum underscored the multifaceted challenges and strategic considerations facing Taiwan's semiconductor industry amidst global geopolitical shifts. Through coordinated efforts between government, industry, and research institutions, Taiwan aims to safeguard its technological leadership and economic security while fostering robust international collaborations.