Taiwan's chipmakers, mainland market complementary: analysts
Published: Mar 07, 2021 09:23 PM
A chip manufacture machine Photo: VCG

A chip manufacture machine Photo: VCG

Even though chipmakers from China's Taiwan island are in a leading position worldwide with their cutting-edge technologies such as 5-nanometer chips that can be used in high-end devices, it is hard for them to ignore the market of the Chinese mainland, where they ship more than 60 percent of their products, industry analysts told the Global Times.

These comments came after some netizens from Taiwan urged chipmakers from the island to stop supplying chips to the mainland following the suspension of Taiwan-produced pineapple imports due to recent cases of pest infestation.

The suspension would deal a huge blow to Taiwan farmers, as 97 percent of Taiwan pineapples are shipped to the mainland. In response, some Taiwan netizens suggested that local chipmakers suspend supplying chips to the mainland, media reported.

Sun Zhenxiang, head of Shenzhen Yudamei Electronic, a company that mostly provides chips, told the Global Times on Sunday that "some chip enterprises in Taiwan island indeed possess top manufacturing techniques, such as Taiwan Semiconductor Manufacturing Corp, whose techniques are world-class, with EUV lithography machines that can even make 5nm chips.

However, Sun said that as EUV lithography machines and many techniques were not originally developed by Taiwan chipmakers, they don't have an absolute right to ban sales to the mainland.

According to Taiwan's local financial authority and media reports, the value of Taiwan's semiconductor exports reached $122.5 billion in 2020, which accounted for 15 percent of Taiwan's 2020 GDP. 

More than 60 percent of its total exported semiconductors went to the mainland and China's Hong Kong Special Administrative Region.

Sun stressed that it is impossible for Taiwan chip manufacturers to quit the mainland market with its huge demand and mature industrial structure.

"Even though Taiwan enterprises can produce the most advanced chips in the world, they also need an industry that has advanced equipment makers to purchase those chips," said Sun.

Many enterprises in the mainland are also striving to overcome the bottleneck, said Sun.

Independent tech analyst Xiang Ligang told the Global Times that it's just basic math. The semiconductor sector accounts for 15 percent of Taiwan's GDP, and if orders from the mainland are left out, it would deal a huge blow to the island's economy. 

Xiang noted that the reason that Taiwan's semiconductor sector holds a leading position in world is more due to its production capacity, not the sophistication of its products. 

"The self-sufficiency rate of chips in the mainland is close to 30 percent, and its goal is to increase that to 70 percent by 2025. With this goal, many cities in the mainland are speeding up their development in the semiconductor sector," Xiang said.