[Book Sip] Semiconductor Hegemony War, TSMC Sets the Rules of the Industry

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Colly Huang, CEO of DIGITIMES, which he co-founded with former TSMC CEO Morris Chang, and a global ICT industry analyst with 40 years of experience, argues that TSMC is setting the rules for the global semiconductor industry. As semiconductors emerge as a key geopolitical weapon and the world focuses on semiconductor technology itself, TSMC is solidifying its presence by establishing the industry's rules. He emphasizes that global companies such as Apple, Nvidia, Google, and Tesla are within TSMC's sphere of influence in the current semiconductor ecosystem. The author predicts that while the U.S. will impose sanctions on China and attempt to build a domestic-centered supply chain, China will still succeed in developing its own technology. Within this context, Taiwan will highlight its value by holding the leadership of the advanced technology ecosystem. On the other hand, he suggests that South Korea can no longer design the future of semiconductors with Samsung alone and proposes considering a strategic cooperation model not to 'catch up with TSMC' but to 'stand together with TSMC.'

TSMC plays the role of an enabler, helping numerous large technology companies create greater value based on superior technology, bold capital investment, and economies of scale. If the currently balanced supply-demand system collapses, causing global industrial disruption, the biggest victims will be American tech companies such as Nvidia, Amazon, Apple, Microsoft, Tesla, Google, and Meta. Sorting out the wheat from the chaff cannot be a merchant’s calculation, and profits squeezed out are not sustainable. True value lies in 'who sets the rules of the game.'

By 2024, TSMC will have 13 fabs for 12-inch wafers and 9 fabs for 6-inch and 8-inch wafers. In addition, it owns 5 factories equipped with OSAT functions and plans to establish at least 10 new factories worldwide by 2025. These factories will serve 528 customers with diverse process requirements. "We will be a foundry for everyone" is TSMC’s motto. The 76,000 TSMC employees strive to maintain the principle of not competing with customers, signaling that they are a harmless partner in the industry.

When Samsung Electronics President Kyung Kye-hyun officially visited Taiwan, I had the opportunity as a Korean industry expert to hold a meaningful breakfast meeting with him at the Mandarin Hotel in Taipei. Since being assigned to Taiwan as a Korean industry researcher in 1985, I have continuously observed and analyzed the development of Korea’s electronics industry over 40 years. During this period, I met several times with three Korean Ministers of Science and Technology?Oh Myung, Bae Soon-hoon, and Jin Dae-je?and maintained informal exchanges whenever senior Samsung executives Lee Jun-woo, Jin Dae-je, Young-son, and President Kyung Kye-hyun visited Taiwan.

Through the relentless efforts of ancestors over several generations, it has developed into a center of cultural and trade exchange between East and West. As a descendant of Taiwan, I cannot help but admire the combination of innate advantages and acquired efforts that have made Taiwan a prosperous and wealthy "island blessed by heaven." More than 80% of the world’s advanced chips, servers, and laptops are produced by Taiwanese manufacturers, and Taiwanese companies demonstrate outstanding technology and competitiveness in all areas of the IT industry, including power supplies, connectors, printed circuit boards, and electronic circuits.

China strongly demands that neighboring countries unconditionally accept the game rules it independently sets, yet China itself, which constantly breaks international frameworks, shows a double standard by not accepting universal international norms. This double standard is precisely why a U.S. government spokesperson cautiously stated, "We listen carefully to China’s words, but everything must be objectively verified."

China is trying to change the nature of its currency through digital currency and electronic transactions while maintaining friendly relations with oil-producing countries. However, digital currency is likely to be a double-edged sword. If the yuan becomes digitalized, China will have to track the flow of yuan to prevent Chinese citizens from freely smuggling money overseas. The newly inaugurated Trump administration will inevitably use the U.S. dollar as a weapon, and countries that abandon the U.S. dollar will face strong pressure from the U.S. government.

TSMC and the Trump Effect: A Forewarning of Great Upheaval | Written by Colly Huang | Translated by Lee Cheol | Gyeongiroum | 360 pages | 30,000 KRW