More Taiwanese semiconductor companies, from chip designers to suppliers of equipment and raw materials, are feeling the pinch due to increasing competition from their Chinese peers, who are betting all their resources on developing mature chipmaking technologies in a push for self-sufficiency, as their access to advanced nodes has been affected by US tech curbs.
A lack of chip manufacturing technology such as extreme ultraviolet lithography (EUV) would ensure that Chinese companies — Huawei Technology Co in particular — lag behind Taiwan Semiconductor Manufacturing Co (TSMC) and South Korea’s Samsung Electronics Co by five to six years, some analysts have said. TSMC is making 3-nanometer chips and is preparing to ramp up production of 2-nanometer chips in 2025, while Chinese companies are still struggling to make 7-nanometer chips at a proper yield rate.
That is in spite of the surprise launch of Huawei’s new premium phone, the P60 Pro, which is equipped with a Kirin 9000S chip made by Semiconductor Manufacturing International Corp (SMIC) using 7-nanometer technology. Analysts widely believe that SMIC has produced 7-nanometer chips at a poor yield rate and high cost. They have said that SMIC could have used less advanced manufacturing equipment, or deep ultraviolet lithography (DUV), instead of EUV technology, to make the 7-nanometer chips, like TSMC did when it produced the first generation of its 7-nanometer chips. That is an extreme case showing how determined Chinese semiconductor companies are to develop their own technology, advanced or mature, to reduce overseas reliance at any cost. Such determination is deeply felt by Taiwanese semiconductor companies across the whole supply chain.
China’s influence over the semiconductor industry could be enormous and cannot be ignored, as private Chinese companies, rather than the Chinese government, are eager to own their own technologies after business plunged due to the chip crunch during the COVID-19 pandemic and the US-China technology dispute, a semiconductor equipment executive said, speaking on condition of anonymity.
Taiwan’s leading semiconductor companies might be affected later, but contract chipmakers focusing on mature technologies are already feeling the pinch. They are under mounting pressure as customers, mostly chip designers, are calling for price cuts after Chinese competitors slashed prices to clear inventory and vie for a larger portion of orders. Over the past two years, chip prices have plummeted about 50 percent, some analysts have said. With new capacity coming online, a wealth of chips could be supplied from China.
Contract chip suppliers or foundries focusing on supplying mature technologies, such as United Microelectronics Corp (UMC), Vanguard International Semiconductor Corp and Powerchip Semiconductor Manufacturing Corp, are seeing a constant drop in prices for chips made using mature technology nodes.
Novatek Microelectronics Corp, which designs display driver ICs, said that it has been working with Chinese foundries, chip packagers and testers, as it aims to gain multiple foundry sources to mitigate rising costs and weather the industry downturn.
Powerchip said it is migrating some capacity to artificial intelligence chips and reducing its exposure to driver IC manufacturing to avoid direct competition with Chinese chipmakers, which usually start price wars to gain market share. Competition is worsening as more Chinese companies enter the market. Even SMIC started making display driver ICs, which was unthinkable before, Powerchip said.
Vanguard, which makes display driver ICs, said it was aware of competition from China and has felt it, as some Chinese chipmakers are using previously idle 12-inch fabs to produce driver IC chips. Vanguard has 8-inch fabs, but a 12-inch fab can offer a better unit cost when producing certain chips.
Taiwanese companies are well-known for their flexibility; hopefully they can survive this test.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
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