Due to increasing government incentives and subsidies for semiconductor manufacturing in regions like the U.S. and China, Taiwan and South Korea’s semiconductor production capacities are forecast to decline by 2027, according to new research from TrendForce.
Semiconductor foundry share is expected to drop from 46% this year in Taiwan and 12% in Korea to a projected 41% and 10%, respectfully, by 2027. Meanwhile, the U.S. and China foundry regions will see an increase, TrendForce said.
Advanced capacity
Taiwan will hold onto the foundry lead and that is unlike to change anytime soon. The U.S., which has been actively encouraging and supporting companies to build new chip fabs in the country, is expected to increase its advanced process capacity to 17%.
Taiwan holds a 68% global capacity share in 2023, followed by the U.S. and South Korea. The region will likely hold onto its majority share with 60% of advanced manufacturing processes by 2027, TrendForce said.
Taiwan also holds nearly 80% when it comes to extreme ultraviolet (EUV) generation processes such as 7nm and beyond.
Japan
Not unlike China, Europe and the U.S., Japan is looking to return to domestically manufacturing semiconductors as well. Already it has made deals with TSMC’s joint venture called Japan Advanced Semiconductor Manufacturing (JASM) and PSMC’s joint venture called JSMC.
Much like these other regions, Japan is also offering up government incentives to build new plants.
Mature focus
Hindered by export restrictions from the U.S. and other countries, China is instead focusing its efforts on mature process capacities and is set to grow to 39% by 2023 as Taiwanese firms look to focus on advanced processes.
China is looking at 28 nm and older process technology backed by government subsidies. This potentially could lead to price competition in products like CIS, DDI, PMIC and discrete power ICs and will have a direct impact on foundries of United Microelectronics Corp. (UMC), PSMC and Vanguard that all play in these markets.
