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Tibco Consulting: Taiwan Foundry Capacity Expected to Decline to 41% by 2027

Update time : 2023-12-19 10:43:36

The results of the Tibco Consulting survey show that Taiwan accounts for approximately 46% of the global semiconductor foundry capacity as of 2023, followed by China (26%), South Korea (12%), the U.S. (6%), and Japan (2%). However, semiconductor capacity in Taiwan and South Korea is expected to decline to 41% and 10%, respectively, by 2027 due to government incentives and subsidies in countries such as China and the U.S. that promote local production.

In terms of advanced manufacturing processes (including 16/14nm and beyond), Taiwan leads with a 68% share of global capacity in 2023, followed by the US (12%), South Korea (11%) and China (8%). Meanwhile, Taiwan holds a nearly 80% share of EUV generation processes (e.g., 7nm and above).
In response to the concentration of semiconductor manufacturing capacity in Taiwan, the U.S., which has a high demand for advanced processes, is actively encouraging and supporting large companies such as TSMC, Samsung and Intel. By 2027, the U.S. share of advanced process capacity is expected to increase to 17%, although TSMC and Samsung will still account for more than half of this capacity.
Japan is also planning a return to semiconductor manufacturing, actively supporting local company Rapidus with a 2nm process that aims to reach. They aim to create a semiconductor cluster in Hokkaido and subsidize foreign companies including Japan Advanced Semiconductor Manufacturing (JASM) and PSMC Sendai Plant (JSMC).
China is aggressively focusing on mature process technologies (28nm and earlier), especially in response to US, Japanese and Dutch export controls on advanced equipment. China's share of mature process capacity is expected to reach 39% by 2027, with room for further growth if equipment procurement goes well.
However, as Chinese manufacturers rapidly expand their mature process capacity, supported by government subsidies, this could lead to intense price competition for products such as CIS, DDI, PMIC and power discrete devices, affecting Taiwanese foundries such as UMC, PSMC and Vanguard.Vanguard expects to be impacted, as its product line includes LDDI, SDDI PMICs and power discrete devices. Other companies such as UMC and PSMC will maintain their dominance in 28/22nm OLED DDI and memory.
In response to chip shortages and geopolitical influences, fabless customers are spreading their risk by partnering with multiple foundries, which can lead to higher IC costs and concerns about repeat orders. Customers also need to validate production lines globally, even with long-term foundry partners, to enable flexible capacity adjustments. As a result, foundries must cope with larger capacity and price competition, while needing to maintain profitability, flexibility in capacity adjustments, new capacity depreciation pressures, and technology leadership.

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