DailyPost 2047

Where Taiwan is positioned in chip foundry is known to the world, we can get into the details of it; how much it controls and what the present competition means. It is less of competition and more of a desperation. Taiwan is the prima donna and remains safely ensconced in the driver’s seat. How has such high-end precision engineering become a near monopoly of this small country? Had Covid-19 not happened, this revelation also wouldn’t  have happened, and it would have gone on in this manner forever. Localization, outsourcing, seamless supply chain etc have a different meaning and connotation to people / decision makers / businesses which are caught in the thick of things, in large number of countries across the globe.

The chip industry will never be the same again, globally. The scare which the supply chain dislocation and increased demand has created, can give nightmares even a few years down the line. TSMC was founded in 1987 and was the world’s first dedicated foundry. Morris Chang, its founder, saw it through till 2018, for 31 years. The technological improvements can be termed as tech breakthroughs. The ecosystem which supported it would also be mind boggling. A capital intensive, technologically challenging on a daily basis and a long gestation period, are the characteristics which myopic tech leaders, companies and countries. Low hanging fruits cannot be the panacea of either business or technology if you have to rule the world. India’s half-hearted misadventures could have certainly not yielded anything.

Now ISMC has come out to establish the first Chip Fab in India, close to Mysore. It would be a planted production capability, but it too needs excellent planning, keeping to timelines, a major chunk of production should be for India and establishing an ecosystem around this production facility, which is ideal for India. Creation, commissioning and getting into production mode to the country’s satisfaction, will remain a challenge till it is achieved. This is 2022. We are trying to wriggle out of a Catch 22 situation. This would give us a fair idea of what a small country like Taiwan has achieved. Taiwan controls almost half of the global foundry capacity, while today governments are racing to build more fabs locally.

According to Trendforce, even with this clamour for create chip fab production infra locally, Taiwan will still control 44% of semiconductor production in 2025, minimally down from 48% today. The country stands tall with a staggering 64% of the worldwide foundry revenue. TSMC currently possesses the most advanced process technology, and it plans to keep most of the production of N3 and N2 nodes in Taiwan. Taiwan has the most 8-inch and 12-inch fabs, 24 of them , followed by China. Even in future foundries it tops the list. While having a projected 44% overall share in 2025, it will control 58% of the world’s capacity for advanced processes; 16nm and below. Are we ready for a long haul of even half of the gestation period Taiwan took? Only one who takes up the challenge can be the winner, rest are not even “the also rans”.

Sanjay Sahay

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