Why is it important: Taiwan will control 48% of the world’s foundry capacity in 2022, according to Trendforce, making it the undisputed leader. Even with the growing number of countries trying to bring semiconductor production into their borders, this figure is expected to drop to only 44% by 2025.
After the last few years of chip shortages caused by the pandemic and geopolitical turmoil, more and more governments are trying to create local chip manufacturing industries. Many of them turn to Taiwanese companies for help in setting up their factories.
This is because Taiwan is critical to the global semiconductor supply chain, accounting for 26% of the market of total semiconductor revenue in 2021, making it the second largest in the world. The country accounts for 27% and 20% of the market in integrated circuit design, packaging and testing, respectively. It also accounts for a staggering 64% of global foundry revenue.
TSMC currently has the most advanced manufacturing processes and plans to keep most of the production of future N3 and N2 nodes in Taiwan. Meanwhile, other Taiwanese foundries such as UMC, Vanguard and PSMC are covering applications that do not require advanced nodes such as automotive and IoT.
At present, Taiwan has the most 8-inch and 12-inch factories, 24 of them, followed by China, South Korea and the United States. In terms of future foundries, Taiwan still tops the list with six, followed by China with four, and the US plans to build three new factories.
Despite this, Trendforce expects Taiwan to still control 44% of global foundry capacity by 2025 and up to 58% of global capacity for advanced processes (16nm and below).