Microchips are essential for evolving industries. They’re at the heart of the devices we use in our homes and on our desktops, smartphones, and more. There are relatively few countries that make the kind of microchips. They end up inside your phone or computer. It means if you want a new device especially made in the USA, you will probably have to custom build it.
However, there has been a shortage of semiconductor manufacturers in the US over the past decade. It’s a trend that has left the country open to a new wave of competition, including Taiwan
Taiwanese manufacturers have their eyes set on replacing their US counterparts. They intend to be leaders in microchip production. From Apple’s iPhone to the Wii, Taiwan has been the go-to place for microchips. So much so that if you have a calculator in today’s world, chances are it comes from Taiwan.
This fact helps explain why so many Taiwanese companies have found success in the US. They are succeeding from a moneymaking point of view. Taiwan has long been one of the world’s leaders in cutting-edge technology.
Semiconductor industry scale
Taiwan is the world’s second-largest producer of microchips. It has been a staple in the semiconductor industry. The country is one of the top three producers of semiconductors. It still dates back to the seventies when it was a side project for Chinese scientists.
The industry has grown since then. In fact, Taiwan has become one of the top three producers in the entire world.
Taiwan produces an impressive 33% of the world’s semiconductors. Further, it has saturated microchip production. Now, the industry is now starting to look for alternatives to China for their supply chains. The US is a major producer of many semiconductor materials used in microchips. However, they do not manufacture all these devices in America.
Semiconductors are too important to remain to Chinese manufacturers. So, Taiwan has started to make new strides to take over the industry.
History
The industry started in the 70s during the military dictatorship era in Taiwan. This was when a famous scientist named Morris Chang decided to launch his company. He called it Silicon Spice. This was a surprise for many people and for years after. No one could predict that he would become the most successful man in this market.
Thus, as you can imagine, the company kick-started a new market that no one could predict at the time.
This was a major breakthrough. Soon enough, other companies were set up to compete with Silicon Spice. The interesting fact is that even today, many of the electronic devices around us use these microchips. This tale of extraordinary success and experimental determination has changed Taiwan forever.
The US government has been trying over the years to bring more manufacturers into their country again. But the process has been slow.
Instead, many large companies like Apple and Intel are focusing on the region. That is creating a huge market opportunity for startups. Small to medium-sized businesses are looking to take advantage of this still-new market.
However, Taiwanese semiconductor manufacturers have a plan that is different from the expected.
A new vision
Taiwan has high status as a producer of semiconductor products. So, the company’s primary focus is not on the manufacturing aspect of it. Instead, they are hoping to capitalize on the demand for computer chips. We use these microchips in many devices and parts of our everyday lives. They include smartphones, computers, and tablets.
In fact, during the past few years, this has become a major source of business in Taiwan. It has changed the landscape of computer chip production worldwide.
The country has been turning away from the microelectronics industry. It focuses on manufacturing chips. Instead, Taiwanese semiconductor manufacturers are focusing on design and testing. This is where they are starting to make a huge impact. They are turning towards computer chips. They are designing them for use in smartphones and other devices.
This is also where the new opportunity lies for startups in the region, especially in Taiwan.
The key to success
Taiwanese semiconductor manufacturers are looking to take advantage of the current market trends. And so far, they are succeeding.
For instance, they have been able to capitalize on the fact that Apple’s iPhone is becoming one of the most popular products in the world today. The company has seen a huge demand for these devices in recent years. This demand is likely to continue growing over time.
The new trend in Taiwan is to produce computer chips for use in these smartphones. It is becoming a more lucrative line of business for the electronics industry in general. For example, a company called Huawei. It has recently started producing chips used in Apple products like the iPhone and iPad. It’s the first Taiwanese firm to start supplying chips to this part of Apple’s production.
This trend was evident at CES several years ago when companies had booths. They set them up to secure contracts with major smartphone manufacturers. They include Samsung, HTC, and even Nokia. The plan is to diversify and create new opportunities for Taiwanese semiconductor companies.
Companies like MediaTek are also developing chips computers. They use it to produce a wide range of other smartphones and products. This trend has even moved towards Taiwan’s startup industry as well.
The future
Taiwan semiconductor startups have a huge opportunity in front of them to take advantage of this new market. The goal is to create more demand for computer chips to improve their design and performance. If they are able to do so, the demand will likely continue to grow over time.
This would bring more business opportunities for Taiwan’s startup industry. The semiconductor industry is still considered an early-stage technology. This makes it a perfect target for startups looking for innovative ideas. As you can see, the semiconductor market is currently undergoing a major shift in Taiwan. The investors and companies are taking advantage of.
Taiwanese semiconductor companies have the opportunity to capitalize on this new market. They can create huge demand for computer chips. They are looking for startups, investors, and businesses to do that. Businesses like MediaTek have already seen staggering success in this area. And they want more of it!
It is still early to tell how much of an effect Taiwan’s startup industry will have on the growing semiconductor market. However, it is clear that startups are having a significant impact on major companies in the industry, like Rayming PCB & Assembly.
Top Semiconductor Companies in Taiwan
The leading semiconductor companies in Taiwan are MediaTek, UMC, and TSMC. These companies represent the best of Taiwan’s semiconductor sector. They have been able to compete with the best semiconductor firms around the world.
1. Taiwan Semiconductor Manufacturing Company
TSMC started operating in 1988. It was a joint venture between UMC and the Government of Taiwan. Since then, TSMC has been one of the top semiconductor manufacturing companies in the world. Most of UMC’s management team acquired shares in TSMC. It became a part of TSMC, thus refraining the possibility of UMC selling out to another company. This would have caused disputes within TSMC’s management.
UMS currently holds an approximately 15% stake. TICT and industry investors hold approximately 85%.
The company has ten fabrication plants in Taiwan. It recently finished construction on a plant in Austin, Texas. The Austin, Texas plant will produce 16 nm chips. TSMC increased its revenue from $12.77 billion USD to $14.39 billion USD in 2017. We expect it to grow at a rate of 10–15% annually for the next three years.
Taiwan semiconductor manufacturing co ltd is also expected to open up a new fabrication facility in China sometime within the next two years.
Products and Services
TSMC made several firsts in the semiconductor industry, such as their first 10 nm chip and 20 nm chip. It is also the only company that is producing Apple’s A10 chip for iPhone 7. TSMC has also developed a technology called multi-patterning. It allows TSMC to create many chips using one wafer.
2. United Microelectronics Corporation
United Microelectronics Corporation (UMC) started operations in 1980 by the Government of Taiwan. UMC is the top semiconductor manufacturing company in the world. UMC currently holds approximately 10% stake, while industrial investors hold approximately 90%. In 2015, UMC announced it would establish a chip base in Hsinchu Science Park, Taiwan. The plans for this new R & D center are to develop new technologies. They will also develop products for Chinese mobile devices and high-end computers. UMC also spent $1.5 billion dollars to establish a new semiconductor fabrication plant in Guangdong Province.
Products and Services
UMC has several notable achievements within the semiconductor industry. It was the first company to develop 0.18-micron technology. It is currently developing 5 nm chips. UMC’s 5 nm technology allows them to produce 5,000 wafers at one time using only one wafer. UMC also made major breakthroughs with its 3D NAND technology. It is helping it create 3D NAND flash chips that we can read and write. UMC is also developing 5G technology which will allow mass production of chips. They should be capable of read and write.
UMC has been developing wireless communication technologies for over 20 years. It is currently the world leader in making wireless chips used in smartphones. UMC is also developing a series of new IoT algorithms which will be more efficient and effective.
3. MediaTek
MediaTek started operations in 1997. Seven Taiwanese engineers who were experts in the semiconductor industry started it. MediaTek currently holds approximately 12% stake, while institutional investors hold approximately 82%. It is the largest semiconductor company in Taiwan.
MediaTek is recently the largest supplier of chips for Apple’s iPhone 7. MediaTek is a subsidiary of the publicly listed company reported to be worth $22.5 billion USD.
Products and Services
They have several notable achievements within the semiconductor industry. MediaTek is the world leader in making processors for mobile communication devices. MediaTek has also developed a lot of unique chips. We use them in mobile devices such as smartphones, tablets, and cameras.
MediaTek chips are helpful in Chinese smartphones such as Samsung’s Galaxy S8 and Note 8. MediaTek chips are also used by Nintendo Switch. It is currently the top-selling home console in Japan.
MediaTek is also involved with the development of 5G technology. It has several plans for this technology. They include the creation of chips that we can use in self-driving cars.
Competitive Situations and Trends
Taiwan is the most competitive market in the EMEA region. It has been experiencing an economic boom in recent years, where Taiwan’s GDP has grown to 4%.
Overall, Taiwan is becoming a great place for startups. This is because of their high contribution to job opportunities, earnings, and competitiveness.
Moreover, Taiwanese startups are also ranked third for startup ecosystems in Asia region. It provides cheap labor as well as support from government initiatives and incubators.
1. Continued Investment in Intellectual Property
Taiwan is a high-priced production base. So, it has been attractive for Taiwanese startup companies. They can develop their core technology and patents internationally. We expect this trend to continue. Taiwan’s investment will increase in R&D and development not only within the country. It will also increase with startups that have offices and operations outside of Taiwan.
2. A Strong Reliance on Distributors
Mobile phones are becoming a major part of Taiwanese society. So, it is important for Taiwanese startup companies to have strong distribution platforms. This will help them reach as many customers as possible.
3. Taiwan Fabless Companies Continue to Vary in Business Strength
In the past five years, there has been a growing number of Taiwanese fabless companies. These companies have become a great source of revenue and profits in Taiwan. This trend will continue in the future. It provides more opportunities for the development of mobile processors and chipsets. This will be a huge opportunity for Taiwan’s startup companies.
4. Mergers and Acquisitions
One of the major options for Taiwanese startups to become successful. It will achieve this through mergers and acquisitions. Taiwan’s semiconductor industry is growing. So, there will be more and more companies that will need to merge to better compete with other companies. This will be a great opportunity for Taiwanese startups. They can pick up a business with the capabilities needed to create the best product possible.
5. The Top Three Taiwanese Fabless Firms Continue to Lead
MediaTek, TSMC, and UMC are the top three largest fabless semiconductor companies. We expect these companies to continue to lead the industry R&D in Taiwan.
6. Taiwan’s Startup Ecosystem Continues to Grow Strongly
The Taiwan startup ecosystem continues to grow at a fast pace. This is because of the following reasons:
– There is a great supply chain for chips in Taiwan. They include top semiconductor manufacturers such as MediaTek, AUO, and SK Hynix
– A wide range of supporting services from incubators and accelerators from the government and private sector.
7. Increasing Global Market Penetration
Taiwanese startups are having a hard time penetrating the global market. This is due to the fact that Taiwanese startups have not been able to develop a strong brand name for their products.
Anyhow, Taiwan’s semiconductor industry will continue to grow in the future. It will continue to be attractive for Taiwanese startups. There are many diverse opportunities in Taiwan’s semiconductor industry. This means that Taiwanese startups have a lot to choose from in innovative ideas.
8. Strong Reliance on the Chinese Market
China is a large market for Taiwan’s semiconductor industry. So, there is a strong dependence on the Chinese market. The majority of Taiwanese semiconductor companies have one-third of their revenue from the Chinese market. So, it is essential for Taiwan’s startup companies to develop products that are very well received in China, as most of their revenue will come from China.
9. Wireless Applications Continue to Dominate revenue
Last year, wireless applications dominated the revenue of Taiwanese semiconductor companies. We estimate that wireless applications will continue to account for a majority of the companies’ revenue. Therefore, Taiwan’s startup companies should focus on wireless applications.
Sustainability
Sustainability is a top priority for many semiconductor companies. The electronics industry has grown at an alarming rate. There are almost no regulations on the manufacturing of these devices. There are many types of e-waste. They include toxic e-waste, Silicon Tetrachloride (SiCl4), flame retardant (BFR), and lead-free solder. Silicon Tetrachloride is a toxic chemical that we use in the production of semiconductors. It is a greenhouse gas that is the most harmful. Silicon Tetrachloride can damage brain cells, especially in children. The chemical is not biodegradable and does not break down to a safe level.
Company involvement
TSMC has a goal to recycle 95% of e-waste. They have also set up a system for the safe disposal of over 28 kg of data center chip packaging waste per month. UMC has a goal to recycle 95% of e-waste by 2020. It is also working on making its chip manufacturing processes more sustainable.
Over 1,000 employees in MediaTek’s factories are responsible for the re-use of these scraps. MediaTek also believes that it is important to recycle e-waste. It has teamed up with a recycling project called “e-Man.”
UMC also has plans in place to recycle e-waste. For example, it collects old computer and mobile phone parts from households in Taiwan. It is also working on reducing pollution and wasting materials used in chip manufacturing. UMC has several plans to cut down on the use of toxic materials in the manufacturing of chips.
To sum it all up, semiconductor companies want to be led by a greener world as well as be a leader in creating innovative new technologies. These companies want to help provide better products and services for their customers. They will also ensure that they are safe and easy to work with. These companies want to be leaders while being leaders in sustainability.
Geopolitics
Geopolitical influence on the semiconductor industry. The Chinese competition with the US over the semiconductor industry was The Great Chip Wars.
The EU does not want to get involved in this competition with the Chinese. It has many rules against doing business with China. Many European companies have found themselves damaged by Chinese competition.
There are two main countries where semiconductor production takes place. The US and Taiwan (also known as China). It is doing a lot of work to help Taiwanese chip producers survive the Chinese competition. The US is also helping them by funding research and development programs.
Both the US and Taiwan are currently protecting their semiconductor industries. Taiwan has a lot of restrictions within its borders. It prevents Chinese competition from taking over the Taiwanese chip producers.
The US is also protecting its semiconductor industry. They do so by not allowing foreign companies to export chips to the US. This is unless they use them for US military purposes. It makes it very difficult for Chinese chip producers to sell chips on the US market.
There are also many political movements taking place in Asia.
Regulation
The chip makers handle the regulation of the semiconductors industry. The control lies with the chip-makers over the manufacturing of chips. Also, they control the end-users of these chips. The United States Department of Commerce handles the regulation of silicon. It places limits on chip price and how much semiconductor companies can control. The US also requires that all chip manufacturers sign an agreement that includes a minimum order size.
The government has been regulating the semiconductor industry since the late 1950s. They regulated the industry because it was monopolistic and lacked competition. The government’s role was to intervene to prevent monopolistic control.
The government involves itself in the regulation of semiconductors. The government monitors not only companies but also individuals. The US does a lot of research on semiconductors and how they could affect people’s health.
Cybersecurity
Cybersecurity risk has been on the rise in the semiconductor industry. Also, it has been increasing over the past decade. The cybersecurity risks are high. This is because many semiconductor manufacturers use their own proprietary hardware and software. Additionally, previous security breaches have led to the theft of IP and trade secrets. It has increased the risk of future cyberattacks.
In the IC era, the semiconductor industry was at its peak in terms of revenues. Growth rates were actually declining over time. This is because sales of traditional computing products began to decline in the early 2000s. In the past two years, revenue growth has stabilized and is forecast to remain constant through 2025. This stabilization is a result of improvements in both prices and volumes. We expect the semiconductor industry to continue growing. It is due to strong long-term trends in global demand.
Taiwan’s semiconductor industry is falling victim to Chinese competition. They have stiff competition with the US over the production of chips. The Chinese competition has caused Taiwan to lose its best chip producers, causing a loss in jobs. In fact, the number of Taiwanese jobs in the semiconductor industry has decreased by 30% in four years. As a result, many companies like UMC are looking for other countries like Vietnam to set up new factories.
Conclusion
Semiconductors are being used in a lot of everyday items. We also use them in many other industries like auto manufacturing and aerospace.
Some semiconductors help make computer chips and other parts that help computers function. In Taiwan, China, and Japan, the demand for semiconductors is high. China and Japan have many more semiconductor factories than Taiwan. So, if they continue to grow, the demand for semiconductors will likely not be so high in Taiwan.
