Mainland China and Taiwan propel semiconductor investment frenzy as Singapore and Japan join the game
- The massive investment in chip manufacturing in Asia comes amid a global supply shortage due to rising demand for chips to power 5G devices and smart vehicles
- Ramp up also comes as governments move to secure chip supply chains amid an escalating tech war between China and the US
A wave of chip foundry investment is sweeping across Asia, propelled by China and Taiwan and with Japan and Singapore also seeking to benefit from strong demand for chips, while the US continues to build up semiconductor manufacturing on American soil.
This week US-based GlobalFoundries, the world’s fourth-largest foundry, announced a new plant in Singapore after pulling out from a plant in the Chinese city of Chengdu last year. It will invest US$4 billion in a new factory in the Lion City to help meet global demand for semiconductors and the project has the backing of Singapore’s Economic Development Board, a government agency.
This came days after it was reported by Nikkei Asia that Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chip maker, is planning its first fab in Japan as Prime Minister Yoshihide Suga puts domestic supply chains for semiconductors high on the government’s agenda.
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According to SEMI, an industry association representing 2,400 members in the semiconductor industry, semiconductor manufacturers will start construction on 19 new high-volume fabs by the end of 2021 and break ground on another 10 in 2022.
Mainland China and Taiwan will lead the march, each accounting for 8 new fabs, with another 6 in the Americas, 3 in Europe and the Mideast, and 2 each in Japan and South Korea.
Taiwan accounted for 63 per cent of global chip manufacturing by revenue in 2020, and its share is expected to rise to 65 per cent in 2021. South Korea is expected to maintain an 18 per cent share in global chip manufacturing in 2021, according to data from consultancy TrendForce.
