IC Insights: How important is Taiwan’s semiconductor industry to the world?

IC Insights, a well-known semiconductor analysis organization, will release the "Global Wafer Capacity Report 2021-2025" later this month, which covers the importance of the semiconductor industry to Taiwan.

IC Insights believes that future global economic growth is increasingly dependent on the continued development of advanced electronic systems. The key components in these systems are integrated circuits, without which advanced electronic systems cannot be developed.

Taiwan has a population of 24 million. How important is the semiconductor industry to it?

Data shows that as of December 2020, Taiwan has the highest share of semiconductor production capacity among any country or region in the world. In addition, the combined share of semiconductor production capacity in mainland China and Taiwan will account for about 37% of the global total, about three times that of North America.

Led by TSMC, Taiwan has the largest share of the world's leading (i.e. <10nm) chip production capacity (63%, as shown below), while South Korea, represented by Samsung, holds the remaining 37%.

The proportion of different regions in the world in different chip process nodes

Companies in Taiwan account for nearly 90% of the island's total production capacity. The few non-local wafer fabs on the island are Diodes, which owns a small 6-inch wafer fab, and Micron's two advanced 12-inch DRAM wafer fabs (Fab 11 in Taoyuan, with a monthly production capacity of 100,800 wafers, and Fab 16 in Taichung, with a monthly production capacity of 100,000 wafers).

Taiwan has 22% of the world's 12-inch wafer production capacity, followed by South Korea at 25%. In contrast, North America accounts for only 11%.

About 80% of Taiwan's total semiconductor production capacity comes from foundry production. It is expected that by 2021, pure foundries in Taiwan (TSMC, UMC, Powerchip, etc.) will account for nearly 80% of the total global pure foundry market. Currently, there is no more important semiconductor production base in the world than Taiwan, China.