Geopolitics & Semiconductors

Geopolitics may bring dramatic

shifts in semiconductor industry
Geopolitics & Semiconductors (Part I)
Author: Colley Hwang, president of DIGITIMES

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Geopolitics & Semiconductors

Acknowledgments and Disclaimers

The author wishes to acknowledge the support from colleagues in their organisations and the support of
their management to develop this report.

The data presented here for the purpose of scenario constructions are based on simplistic projection and
they should be used with caution.

This publication has been prepared for general guidance on matters of interest only, and does not constitute
professional advice. You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given as to the accuracy
or completeness of the information contained in this publication.

This publication (and any extract from it) must not be copied, redistributed or placed on any website,
without prior written consent.

All trade marks and copyright materials including data, visuals and illustrations are acknowledged as they
appear in the document.

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Geopolitics & Semiconductors

Executive Summary
The semiconductor market has been thrown into disarray by global developments over the past few years:
the COVID pandemic and the US-China trade war, both of which are sending governments and companies
rethinking their strategies. While the COVID impacts seem to be coming to an end, the geopolitical tensions,
first triggered by US president Donald Trump’s trade sanctions on Chinese tech giant Huawei, promise to
linger in the form of what some describes as a New Cold War centering more around tech prowess than
military might.

At any rate, the production ecosystems are heading towards further decentralization with suppliers having
to set up diverse sites to serve clients from different camps – split along the politico-economic divide
between China and the rest of the world. And major players in the semiconductor sector are looking at
ways to improve self-sufficiency or securing partnerships with others, such as Taiwan, whose dominance
in the wafer foundry sector has been the envy of the rest of the world. Taiwan is among the top players in
the world of semiconductor, forming part of the so-called “IT first island chain” with Japan and South Korea
in the US latest move to contain China. In turn, China has made aggressive plans to raise its semiconductor
self-sufficiency, trying to leverage its huge domestic market, which normally accounts for about one fourth
of global semiconductor consumption. But in terms of output value and technological capacity, China still
lags behind the US, South Korea and Taiwan.

This white paper discusses the impact of geopolitics on the semiconductor supply chain and explores the
possibility of coopetition among the major countries and companies in the race.

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Geopolitics & Semiconductors

Alan Turing was a highly influential computer scientist in the 1940s. In 1958, the integrated circuits
appeared. And since the 1970s, information technology has played a key role in various fields of computing,
thanks to advances in semiconductors and data storage. PCs with semiconductors have made information
technology (IT) synonymous with “cutting-edge technology.” The flourishing computer and semiconductor
industry sectors enabled the IT sector’s output to leap beyond the US$500 billion threshold in 1997. Taiwan
and South Korea both ushered in a booming era and became the key players of the global supply chain.

MediaTek chairman Ming-Kai Tsai, dubbed as the “godfather of Taiwan’s IC design industry,” recently said at
an event marking the 20th anniversary of the death of Kwoh-Ting Li, who is credited with Taiwan’s IT-based
economic miracle: “We overestimate short-term interests and underestimate long-term benefits.” Tsai
noted that few were upbeat about MediaTek when it was founded in 1998. However, MediaTek’s revenue
had reached US$17.6 billion in 2021, becoming not only one of the world’s top-3 IC design houses, but also
the world’s largest mobile application processor (AP) supplier.

Tsai said the IT market size reached US$3 trillion in 2020, but the Internet brought even much bigger
business at as much as US$13 trillion. We can foresee the overwhelming arrival of diverse applications
based on artificial intelligence (AI) and machine learning underpinned by advancements in semiconductor,
computing power and data storage. Once various applications of deep learning and AI take off, the IT market
size is expected to exceed US$60 trillion in 15 years. How many business opportunities will that bring to
the semiconductor industry? Tsai repeatedly stressed: “Never overestimate short-term interests and never
underestimate long-term value.”

Evolving from technology-driven to application-driven era

So far the development of the semiconductor industry has basically followed Moore’s Law. Enterprises can
capitalize on business opportunities by mastering production technology and pinpointing the timing of
entering the market. We believe that the demand for high-performance computing will not diminish. But
the demand growth momentum will not be driven by PCs, but rather by mobile communications coupled
with IoT, V2X services and other diversified business opportunities. Furthermore, the market-driving force
will be transformed from the one-way top-down approach into an interlaced matrix of multi-track mode.
The industries of future cars, industrial control, national defense, and even consumer electronics will all be
reshaped. It may seem complicated, but the quest for business opportunity has patterns to follow. But the
geopolitical risks as a consequence of the US-China trade war and Ukraine-Russia war are more difficult to
address.

The US and Taiwan have co-constructed the world’s most comprehensive semiconductor value chain. South
Korea has a dominant role in the memory market, but it is keen on expanding beyond that, and is making
aggressive moves vying for business opportunities in wafer foundry. Despite the likeliness of losing its
position as world’s third largest economy in terms of GDP, Japan, with abundant experience in industrial
development, still has a role to play. Catalyzed by the deteriorating Japan-South Korea relations, Renesas,
Rohm, Kioxia, Canon, automated testing equipment producers TEL and Advantest, coupled with excellent
scientific and technological talent, have paved the way for promising partnerships with Taiwan.

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China is still outside of top four in the global semiconductor race, but it has a “wild card” in the form of its
enormous home market and the Chinese government’s ambitions enabling its competition in the global
race. As a powerhouse in the EU, Germany is expected to surpass Japan in 2030 as the world’s fourth largest
economy in terms of GDP. With its automotive industry under structural transformation, can Germany
maintain its international competitiveness in the new era of EVs without the help of Asian supply chains?
Faced with a trade deficit of more than US$50 billion in electronic products, India cannot overlook the
semiconductor industry. India has been keeping wooing Taiwanese investments, and ASEAN members
Vietnam and Thailand will not simply sit back and watch. The industry is ushering in a golden era of
unparalleled business opportunity; and yet there are many unpredictable variables.

There has always been uncertainty in industrial development, but we are convinced that semiconductors
have a “better future.”

The semiconductor value chain

While Russian troops were bombing Ukraine, a US delegation led by Michael Glenn Mullen, ex-chairman
of the joint chiefs of staff, arrived in Taiwan, followed closely by a separate visit by former US secretary of
state Mike Pompeo. Taiwan has never received such high-profile attention since it withdrew from the UN 50
years ago. Some attribute the dramatic change to the blessings by Taiwan’s “sacred mountain range” – the
semiconductor firms that locals believe are protecting the country.

The semiconductor industry is likened to “nuclear weapons” in the global politics.

Without massive nuclear weapons, Russia, with total GDP lower than that of South Korea, would not be
strong enough to invade Ukraine, let alone deterring the West from imposing a no-fly zone over Ukrainian
territory.

So far, the US, Taiwan, South Korea and Japan account for 82% of the global semiconductor production
capacity, while China represents 60% of the global market demand. This is in line with the fact that 61%
of the semiconductors exported by Taiwan and South Korea went to China in 2021.

However, it is prone to bias if we observe the industry by referencing solely the manufacturing capacity
of wafer foundries. We need to take into accounts the most upstream sectors like EDA/IP design tools,
materials, equipment as well as backend packaging and testing, and even components distribution. If you
look at the market side, you need to understand which brand vendors deliver products to the end market
and how brand vendors can be divided into IDMs (integrated device manufacturers) and fabless IC design
houses. Supply chain players in the global race are not limited to companies from the US and Taiwan;
major firms from South Korea, Japan and Europe’s are also very active. The rise of Chinese enterprises
is complicating co-opetition among all players. There are many different dimensions to such intricate
relationships being reshaped by different market opportunities.

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Basically, we look at the semiconductor industry from two dimensions: the market side and the supply side.
The market side includes IC design houses and IDMs that sell their own-brand products into the market.
Well-known IDMs include Intel, Texas Instruments (TI), Infineon, Renesas, Rohm, Samsung and Taiwan’s
Winbond, Macronix, Nanya Technology and others. IC design houses include Nvidia, Qualcomm, AMD,
and Taiwan’s MediaTek and Realtek. According to The Semiconductor Industry Association, the combined
revenues of global IDM and IC design houses in 2021 reached US$555.9 billion – the total of the global
semiconductor market in 2021.

But the output of US$555.9 billion actually involves a lengthy process across various sectors (see below
diagram). In general, instead of going the whole nine yards, design houses and IDMs look for support from
design tools (EDA) and intellectual property (IP) companies to accelerate the product design process and
reduce costs. Upstream suppliers of design tools and IPs contribute about US$21 billion a year of the total
output.

Upon completion of the product design work, they have to confirm the fabrication processes with the wafer
foundries. The IP rights and experience of the foundries play an integral part in mitigating development
risks for the design houses and the brand vendors. The global wafer foundry market has just exceeded
the benchmark of US$100 billion, reaching US$106.6 billion, of which the biggest Taiwan-based foundry
accounts for the highest share.

The processed wafers are then delivered to the packaging and testing plants, which had a global output
value of US$39.7 billion. Taiwanese companies occupy more than half of the global market share in this
sector. In recent years, China’s packaging and testing sector has become the world’s second largest force
next to Taiwan through mergers and acquisitions. Basically, each area requires its own specific know-how
and it is almost impossible for any individual companies to assume all tasks or for any country to integrate
all manufacturing sectors. This has been a tremendous challenge ever since China started building a
semiconductor industry on its own.

Supply/demand in semiconductor industry in 2021

Retail

Industry Output Value: US$893B

Market demand

Non-
Computing
Memory
190B 107B 40B (38%)

EDA 35% Logic IC

FablessFoundry OSAT
14B Control
IC Comm.
Direct sales

366B 556B Others (31%)

IP 6B IDM/Fablite

CE(10%)

Memory
Auto.(11%)
• DRAM
Equipment 65%
Others Material • NAND
103B 62B • Others Ind./Gov.(10%)
5B

Source: DIGITIMES Research, March 2022

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How the semiconductor output is shared

As mentioned above, the semiconductor market has reached the US$500 billion milestone recently, with the
total output reaching US$555.9 billion. We expect it to exceed US$600 billion in 2022 and more than US$1
trillion in 2027 if the megatrend remains unchanged.

The US$555.9 billion semiconductor output is propped up by a supply chain which entails a division of labor
that generates annual revenue of US$892.5 billion. Among the major players, the US IDMs (such as Intel and
TI) and IC design houses (such as Nvidia, AMD and Qualcomm) create US$273.9 billion in market value and
account for 49.3% of market share. In addition, the American-based equipment providers (such as Applied
Materials, Lam Research, KLA Tencor and Teradyne) and suppliers of IP and design tools (such as Synopsys
and Cadence) account for 40.4% of the global industry output of US$359.8 billion.

Close on the heels of the US players are Taiwanese firms which have attracted much attention in recent
years. Well known for its wafer foundry and IC design industry sectors, Taiwan generated revenue of
US$44.8 billion from IC design and IP sectors with about 24% of the global market share in 2021, while
the revenue of wafer foundry reached US$71 billion, accounting for 67% of the global total. On top of
that, Taiwan’s IC packaging and testing houses reported total revenue of US$23.2 billion, accounting for
58% of the global backend output. All these industries constitute indispensable parts of the global supply
chain. Besides, Taiwan also has successful IDMs (such as Winbond, Nanya and Macronix). In recent years,
TSMC and others have actively fostered local equipment and materials providers to significantly expand
the industrial scale and upgrade quality. In 2021, Taiwan’s semiconductor output value reached US$156.9
billion, representing a 18% share that made Taiwan the second largest country in the global semiconductor
supply chain.

US and Taiwan semiconductor firms account for 58% the global output. South Korea, Japan and Europe also
have well-established semiconductor supply chains, while the emerging China positions semiconductors
as a strategic industry. South Korea excels in memory industry with output value of US$105 billion plus
US$20.1 billion from wafer foundry. Both sectors contributed a total of $125.1 billion, representing 95%
of the output of the entire Korean semiconductor industry. Unlike Taiwan, South Korea does not have
flourishing IC design and package/testing sectors, and the county’s entire semiconductor industry had an
output value of US$131.8 billion, accounting for 15% of the global supply chain. Having well-established
IDMs, Japan and Europe are particularly masterful in the semiconductor for the automobile industry.
Ushering in a new era of switching from traditional cars towards EVs and self-driving vehicles, are Japan and
Europe ready to develop and produce on their own or partner with Taiwan, South Korea and the US to map
out a new industrial landscape? This would remain the focus of global attention. The output value of the
semiconductor industry in either Japan or Europe is nearly US$90 billion, each accounting for almost 10% of
the global semiconductor supply chain.

The evolution of the semiconductor industry in these countries is very clear, while China stepped up its
semiconductor development at the turn of the century. With semiconductor imports exceeding oil imports
in 2013, the Chinese authorities were having a rude awakening and came to realize that deficiencies in

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semiconductors would eventually “choke off” its development of advanced technology. The current output
value of China’s semiconductor industry is US$66.1 billion, accounting for 7% of the global total.

Distribution of global semiconductor industry value of US$892.5 billion in 2021

US China Taiwan Japan South Korea Europe

US Taiwan 156.9B
359.8B 17.6%
40.3%
89.8B 87.5B
Fabless, 45
10.1% 9.8%
IDM
OSAT, +others,
Foundry, 71 23 18

South Korea
131.8B Japan, 90 Europe, 88
IDM, OEM, 166 Fabless, 115 14.8% o
China 63.1B t
OEM, Ő h
IP/ EDA, 7% ņ e
20 r
Assembly/ Ŏ s
Test, Others, IDM, Fabless, , ,
Equipment Materials, 60 19 IDM, 105 7 others, 29 25 9 3
Source: DIGITIMES Research, March 2022

The ‘sacred mountain range’

With a population of merely 23.32 million people, Taiwan had a semiconductor industry output of US$156.9
billion in 2021, accounting for 17.6% of the global total, making it the second largest semiconductor country
next to the US. It has been bolstered by wafer foundries, IC design houses, and package/testing firms that
altogether play a key role in the global supply chain. The achievements did not take place overnight.

In 1974, an elite group from The Industrial Technology Research Institute (ITRI) went to RCA in the US to
learn CMOS technology, which was Taiwan’s very first attempt at building its semiconductor industry. Then
came some investment projects, but these could barely inspire key industrial transformation or innovation.

In 1987, considering that IC design houses could not afford capital-intensive and technology-intensive
fab investments, TSMC founder Morris Chang introduced a pure-play wafer foundry model which laid
the foundation for TSMC’s leadership. In fact, TSMC is perhaps the tallest in the “sacred mountain range”
consisting of a slew of semiconductor companies.

During the years of TSMC’s inception, Taiwan was beginning to take off in the PC era, thanks to Acer, MiTAC
and other leading manufacturers. In 1985, Microsoft introduced the Windows software, IBM proposed the
IBM-compatible computer architecture, and Intel’s 386 CPU allowed PCs to have a standard platform. By
the mid-1990s, Taiwan became the global hub computer of manufacturing: More than 80% of the world’s
PCs were from Taiwan. The economies of scale in PC manufacturing accelerated demand for parts and

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components, which in turn provided a hotbed for the development of the IC design sector. The local IC
design houses also were set to benefit Taiwan’s two major pure-play foundry houses: TSMC and UMC.

In the 1990s, Taiwan’s electronics companies secured sizable capital through public listing, as investors
showed keenness in investing in the electronics industry. However, a moderate population of 23.32
million could not sustain the rapid growth of the electronics industry. Taiwan and China joined the World
Trade Organization (WTO) successively around 2001, when Taiwan makers started a massive relocation of
manufacturing facilities to China. The launch of iPhone in 2007 helped escalate the prosperity of China’s
local mobile phone manufacturers and IC design houses, and of course, Taiwan-based makers captured
most of contract chip manufacturing businesses. Before Trump imposed sanctions on Huawei, the Chinese
firm’s orders had contributed near 20% of TSMC’s total turnover. Booming cryptomining businesses have
also brought more affluence for Taiwan’s wafer industry.

The birth of Taiwan’s semiconductor industry was supported by a baby boomer generation in the 1970s
with talent in science and engineering. Taiwan’s achievements can be attributed to both internal conditions
and external opportunities. Taiwan’s success, which is particularly remarkable judging from the size of
its population, resources and technological prowess, has drawn envy from many countries. Is Taiwan’s
semiconductor industry, as it stands now, exposing the country to risks or shielding it from harm? It depends
on how you look at it.

Estimated revenue of semiconductor industries in each country, 2021 (Unit: US$100M)

US Taiwan Korea Europe Japan China others Total

IC Design 1,150 448 21 7 17 250 6 1,899

IDM 1,589 91 1,050 465 350 90 25 3,660

Global Semiconductor
2,739 539 1,071 472 367 340 31 5,559
Market

Foundry 66 710 201 0 0 89 0 1,066

OSAT 64 232 6 0 0 95 0 397

IP/EDA/Design Service 124 15 0 56 4 2 5 206

Equipment/Materials 605 73 40 347 527 105 0 1,697

Global Industry Output Value 3,598 1,569 1,318 868 881 661 30 8,925

Source: DIGITIMES Research, March 2022

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Co-opetition among the top 4

It is estimated that China’s total GDP will surpass that of the US to become the world’s largest economy
by 2030. It would be another great leap for China in terms of economic strength after it overtook Japan in
2009. More than that, India could supplant Japan with young demographics dividends, while Germany could
also leapfrog Japan, relegating the Northeast Asian powerhouse to fifth place in global economy. Japan
could also fall behind its former colonies, Taiwan and South Korea, in terms of per capita income.

Underlying the macro economic data are drastic changes of global politics. Winston Churchill, who led
England to fight against Germany in World War II, once said: “For 400 years the foreign policy of England
has been to oppose the strongest, most aggressive, most dominating power on the continent.” Maybe
that’s the reason why Britain is firmly standing with Ukraine in its defense against Russia’s invasion. Then
what is the national strategy of the United States? The US is a country that controls key global initiatives
through science and technology, military deployment, financial strength, and intellectual property rights.
When Chinese president Xi Jinping asserted: “The Pacific Ocean is large enough to accommodate two
great powers,” it must have raised an alarm for the Americans. For US president Donald Trump, it wouldn’t
be acceptable to let a major rival lurking in the backyard. Three consecutive US trade bans have wreaked
havoc on Huawei and other leading Chinese enterprises, leading to an unpredictable future for China’s
semiconductor industry.

In February 2019, the Trump administration disclosed that 5G, quantum technology, AI and smart
manufacturing will be the key to maintaining the global leadership of the US, calling on companies to
support the policies of the US government. In February 2021, the Biden administration again emphasized
that the US should meaningfully regain control of the global supply chain. The key industries identified
include semiconductors, automotive batteries, rare earths and pharmaceuticals, of which semiconductors
are the most important. The US government even asked Taiwanese and South Korean wafer fab foundries to
provide production and marketing data, which was a rare move in the world of free trade.

Will Taiwan, Japan, and South Korea that form the first island chain – now also known as the technology
island chain – unite under the banner of Biden? Or will they be engaged in some form of partnerships with
potential rivals of the US, or in intense competition against each other? Semiconductors’ functions are
mainly manifested in the computing power and data storage. TSMC reigns in advanced wafer manufacturing
processes of 7nm and smaller nodes, while South Korea’s Samsung and Hynix are leading manufacturers in
the memory sector.

Memory and non-memory sectors differ in business models and market demand. Despite being placed in a
strategically ambiguous and contradictory position, Taiwan has the most advanced logic chip manufacturing
capabilities. When US, German and Japanese car makers see production disrupted by semiconductor
shortage, they point their finger at Taiwan. The automobile industry is no ordinary industry: The automobile
industry in several industrial countries account for 8-10% of their national GDP. The shortfall of vehicle-use
ICs has resulted not only in output decline by millions of cars over the past two years, but also in business
loss for after-sales services, considering the average life of each car is about 11.9 years. Ministerial-level

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officials from major industrial countries that do not have diplomatic ties with Taiwan have requested Taiwan
supply as many components as possible. In other parts of Asia, Japan-South Korea relations are getting
sour. Samsung and Hynix have set up new memory factories in Xi’an and Wuxi in China. All these events or
strategic moves concerning semiconductor payers are all essentially affected by geopolitical factors.

On the other hand, faced with a decentralized production system, the resource-deficient Taiwan must seek
cooperation from all over the world. Apart from helping rebuild semiconductor manufacturing capacity in
the US, TSMC is constructing a fab for making automotive and image recognition chips in Kyushu, Japan. Will
emerging ASEAN and South Asian countries participate in the global race? India, likely to become the third
largest country in terms of GDP in 2030, has long been wooing Taiwan’s IT enterprises to invest in India.
The EU was trying to talk to Taiwan about possible cooperation in the chip sector before Intel announced
an investment of EUR33 billion into setting up a chip fab in Germany. At the same time, UMC announced its
investment expansion plan in Singapore. Are these initiatives paving the way for further decentralization of
the supply chain?

US-Taiwan partnership: The winning formula

In early spring of 2022, IT companies set up recruitment booths at major universities to attract fresh
graduates. MediaTek and ASML each offered almost 1,000 job vacancies. TSMC offered 8,000 job openings,
some of which were for analysts with doctoral degrees in politics and economics.

But is it easy to understand the complex semiconductor industry for people with politics and economics
backgrounds? “Laymen” can even get disoriented with the definition of semiconductor output value and
market value, let alone analyzing international co-opetition in an industry involving tens of billions of
dollars. Is it meaningful to measure Taiwan’s global influence by dividing TSMC’s turnover by global market
size? Certainly not, because TSMC and UMC handle part of the processing along the value chain, rather
than deliver the end products. Seemingly interrelated sectors – wafer fabrication, IC design, packaging/
testing, materials & equipment, IP tools and distribution – are actually operating independently. It is difficult
to comprehend all the intertwined details, and it’s complicated by the fact that each country has its own
strengths. No single country can claim to have mastered all the key elements and skills. It’s a complex web
of trading and geopolitical relations among countries.

Basically, the alliance between the US and Taiwan is the winning formula for the semiconductor industry
at this stage. Underpinned by EDA/IP players, combined with the highly efficient manufacturing capabilities
of TSMC, ASE, Foxconn (Hon Hai), etc, Nvidia, AMD, Apple, Qualcomm, Xilinx and other American IC
design companies, have created a cutting edge in the market that is beyond the reach of others. We
anticipate Google, Amazon, Microsoft and others will make good use of this system for developing AI, car
chips and other emerging applications in what is conceived as The Fourth Industrial Revolution. We believe
that the megatrends will remain mostly unchanged until 2030, but individual elements triggering changes
have begun to ferment starting 2022.

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The US and Taiwanese firms have been working closely. Incentive programs designed to bring businesses
back to Taiwan has brought US$60 billion in investment by returning Taiwanese investors since 2019. A
major focus of investment has been on smart manufacturing. With Taiwan’s fast ageing population, it makes
sense to rely more on smart factories. US service providers are offering a variety of services to shore up
efficiency of the supply chain.

The world’s largest EDA design companies, Synopsys and Cadence, have combined with the cloud services
of AWS and Microsoft to provide IP services over the cloud. Other companies like MediaTek and TSMC are
now using various design tools from American service providers through the cloud. In response to surging
demand for cloud services, Microsoft has announced that it will soon construct Hyperscale Datacenter No.
66 in Taiwan.

A hyperscale datacenter refers to a datacenter with more than 5,000 servers. There are more than 600
hyperscale datacenters in the world up to date. AWS, Microsoft, and other tech-giants such as Google, Meta
and IBM, are all actively deploying datacenters, boosting businesses for server suppliers. And at least 90% of
the servers are designed and produced by Taiwanese makers who have gradually re-shored manufacturing
systems to Taiwan amid growing US concerns over security. Server vendors including Wiwynn, Quanta and
Inventec have set up factories in Taiwan to fulfill orders from US iconic enterprises. Even Chenbro Micom
that produces chassis has set up a new factory in Chiayi, southern Taiwan to meet the needs of US enterprises,
following a growing trend of splitting the supply chain into two based on a G2 landscape (US and China).

Taiwan-US semiconductor ecosystem

ŔŦŮŪŤŰůťŶŤŵŰų
ŃųŢůť ŎŢůŶŧŢŤŵŶųŪůŨ
ŔŦųŷŪŤŦ őųŰťŶŤŵİŔŦųŷŪŤŦ
ŃųŢůť

EDA, IP, Equip.

Source: DIGITIMES Research, March 2022

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Geopolitics & Semiconductors

Colley Hwang, president of DIGITIMES, is a tech industry analyst with

more than three decades of experience under his belt. He has written
several books about the trends and developments of the tech industry,
including Asian Edge: On the Frontline of the ICT World published in
2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding
published in 2020.

Hwang is also a columnist for “Colley & Friends” on DIGITIMES

website in Chinese. The English translation can be seen on “DIGITIMES
perspective,” of DIGITIMES Asia.

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Will Taiwan, South Korea, and

Japan join semiconductor
alliance with US?
Geopolitics & Semiconductors (Part II)
Author: Colley Hwang, president of DIGITIMES

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Geopolitics & Semiconductors

Acknowledgments and Disclaimers

The author wishes to acknowledge the support from colleagues in their organisations and the support of
their management to develop this report.

The data presented here for the purpose of scenario constructions are based on simplistic projection and
they should be used with caution.

This publication has been prepared for general guidance on matters of interest only, and does not constitute
professional advice. You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given as to the accuracy
or completeness of the information contained in this publication.

This publication (and any extract from it) must not be copied, redistributed or placed on any website,
without prior written consent.

All trade marks and copyright materials including data, visuals and illustrations are acknowledged as they
appear in the document.

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Geopolitics & Semiconductors

Executive Summary
The semiconductor market has been thrown into disarray by global developments over the past few years:
the COVID pandemic and the US-China trade war, both of which are sending governments and companies
rethinking their strategies. While the COVID impacts seem to be coming to an end, the geopolitical tensions,
first triggered by US president Donald Trump’s trade sanctions on Chinese tech giant Huawei, promise to
linger in the form of what some describes as a New Cold War centering more around tech prowess than
military might.

At any rate, the production ecosystems are heading towards further decentralization with suppliers having
to set up diverse sites to serve clients from different camps – split along the politico-economic divide
between China and the rest of the world. And major players in the semiconductor sector are looking at
ways to improve self-sufficiency or securing partnerships with others, such as Taiwan, whose dominance
in the wafer foundry sector has been the envy of the rest of the world. Taiwan is among the top players in
the world of semiconductor, forming part of the so-called “IT first island chain” with Japan and South Korea
in the US latest move to contain China. In turn, China has made aggressive plans to raise its semiconductor
self-sufficiency, trying to leverage its huge domestic market, which normally accounts for about one fourth
of global semiconductor consumption. But in terms of output value and technological capacity, China still
lags behind the US, South Korea and Taiwan.

This white paper discusses the impact of geopolitics on the semiconductor supply chain and explores the
possibility of coopetition among the major countries and companies in the race.

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The semiconductor industry is one that constantly pursues technological innovation. TSMC and Intel have
dual-track R&D teams to meet the technical needs of different generations. For 2022, TSMC has set aside
US$42 billion in capex, and Samsung and Intel are also striving to cross the threshold of US$40 billion. Such
massive investments are meant to constantly advance technology and to reduce carbon emissions.

The industry’s model of competition is by no means static. Around 2008, 12-inch fabs using 28nm node
stressed material innovation for the copper process. FinFET architecture became the key to success when
the technology progressed to 16/14nm. After the introduction of 7nm node, the combination of the two
technologies, or the dual-track system, became the goal of the industry.

ESG brings new variables

The EUV equipment from Europe is the key to entering the more advanced process node generations. But
the dilemma is that the high-energy-consuming equipment can be hardly overlooked in the face of ESG
challenges over their contribution to the greenhouse effect. Compared to social (S) and governance (G)
issues, the environmental (E) issue is transforming the current pressure to future costs and even operational
risks. Businesses must come up with measures to tackle carbon emissions and improve energy storage in
order to meet carbon reduction goals by 2030.

TSMC reportedly turned out to be the top carbon-emitting semiconductor company in the world in 2020,
with total carbon emissions of as much as 15.5 million metric tons. It was followed by Samsung’s 12.5
million metric tons. According to a South Korean media report, Intel in third place only had carbon emissions
of merely 8.3 million metric tons, with green energy accounting for 82% of its total energy consumption. We
can foresee the future competition may not necessarily hinge on technology, economies of scale, yield rates
or pricing. Disruptive innovation can come by not merely from technological advancements. The rules of the
game can be the key to eventual success.

At present, there are more than 100 sets of EUV machines deployed for the most advanced chip production
lines, with more than 90% of them in wafer foundries, and less than 10% in memory plants. It is obvious
that the decisive battlefield lies in wafer fabs. South Korea has vowed to become the top semiconductor
producing country in all sectors by 2030, and standing in its way is TSMC. Does Samsung stand any chance
of unseating TSMC by 2030? The two Asian companies emphasize production efficiency and technological
competition, while the US-based Intel may integrate upstream EDA/IP players and partner with Internet
giants that develop AI chips or self-driving chips. Or it may challenge TSMC’s global leadership through
M&A. The imperatives of ESG may turn out to be a strategic weapon. We believe that Samsung may be
nothing more than an also-ran, but Intel is the real competition.

The present discussion looks at the competition from the angle of an observer in Asia, exploring the
competition between Taiwan and South Korea, the Taiwan-Japan alliance, the US dominance in the new
semiconductor landscape, and China’s wild card enabling its claim in the race to the global club of top-4.
Will Germany and India participate in the global race? These are all issues that raise concerns among
the international community. We have seen Intel’s frequent moves during the past two years, and other
companies are also expanding aggressively. Who will be the winner 10 years from now?

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Intel strategic deployments in last two years

Samsung is not TSMC’s main competitor!

Begin Germany Invest US$7.1B Spend US$20B
Invest
investment in Malaysia over building two new
US$475M in
negotiation 10 years plants in Ohio
Vietnam

Invest Announce New plans for auto

US$3.5B in EUR80B Negotiate with Italy
semiconductor
New Mexico investment to build EUR8B
business?
in Europe assembly/test plant

Source: DIGITIMES, March 2022

The market side of the semiconductor sector

When semiconductors are assembled in end products, about 38% of them end up in computing devices
such as notebooks and servers, 31% in telecom and networking products, and 10% each in industrial
computer, vehicles and consumer electronics. It is predictable that the proportion for future computing and
communication products will slightly drop, with significant increase in automotive semiconductors.

According to DIGITIMES Research, global notebook shipments reached 158 million units in 2019 when the
COVID-19 epidemic started. The number of notebook sales unexpectedly soared to 246 million units in
2021, thanks to the WFH trend. However, we believe that the demand for the notebook demand has been
adequately satisfied, and there will be a decline in 2022, which can more or less alleviate the shortfall of
semiconductors. On the contrary, in the computing sector, demand for servers will continue to grow against
the backdrop that network giants are scrambling to build datacenters.

Mobile phones that play the major role in the mobile communication sector have entered the plateau of
maturity. The growth in China’s 5G smartphone market will remain flat in 2022 amid the Ukraine-Russia
War, and China’s efforts to maintain economic growth at 5.5%. The computer and communications sectors
are not promising, but electric vehicle (EV) business opportunities continue to rise. Various industrial control
applications are also bringing many unexpected business opportunities in the IoT era.

The impact brought by the decentralization of production systems deserves much more attention. Taiwanese
companies are moving their production systems to ASEAN countries. Northern Vietnam is taking the lead to
attract Taiwanese investments thanks to the geographical advantages of China’s Pearl River Delta, and India
is attracting foreign investments through the Production Linked Incentive scheme (PLI). Taiwan’s Foxconn
(Hon Hai), Pegatron and Wistron have set up production bases in India in response to clients’ requirements.
The entire semiconductor logistics system is changing to meet needs of diversified and localized production,
which will also affect the deployment of the logistics service industry.

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Large electronics distributors including WPG, WT and Avnet will also adjust their supply systems to address
customers’ needs. About 80% of the parts have been distributed through Hong Kong in the past, and now
we can expect that more than 30% will be shipped through ASEAN and South Asian countries by land or sea
in the future.

Though electronics distributors have not received much attention in the past, they have been dedicated
to integrating logistics systems in the past 10 years through smart warehousing centers and technical
support capabilities, making themselves an indispensable part of the industry. About 35% of the US$555.9
billion semiconductor market or nearly US$200 billion of semiconductors were sold to the market through
electronics distributors in 2021. The revenue of WPG reached US$28.2 billion in 2021 followed by WT with
US$16.1 billion. Both are among 17 Taiwan-based electronics firms with turnover of more than US$10
billion. Avnet’s revenue in Asia reached around US$10 billion.

Looking ahead, EVs are the focus of attention, and the production ecosystem for EVs will not only be
concentrated in the traditional automobile producing countries in Europe and the US. Asian countries
including Vietnam, India and Thailand will ally with local service providers to produce their own EVs, and
electronics distributors will play a more crucial role. Thailand’s Hana, the Philippines’ IMI and Vietnam’s
VinFast are promising newcomers to the carmaking industry. On the other hand, traditional auto parts
suppliers such as Denso, Continental and Magna may step up efforts to tap new business opportunities
in Asia through partnerships with leading electronic distributors in Asia, or transport Asian-made
semiconductor parts to the automotive ecosystems of Europe, the US and Japan.

Geopolitics is reshaping the landscape of the semiconductor industry, fueled by industrial transformation
itself and market diversification. The production ecosystem led by Asian wafer foundries is expanding
massively. From the perspective of the Asian supply chain, the global supply chain is bracing for a decade of
dramatic changes.

Production expansion plan for major foundries in 2022 (Unit: 1,000 8-inch wafers)

Monthly
2020 monthly production Expansion 2022(f) 2021(e)
production capacity capacity rate Expansion rate Expansion focus
1 TSMC 2,567 2,804 9% 10% 12 -inch (7/5/4/3nm)
2 Samsung 858 974 12% ~10% 12 -inch (5/4nm)
3 UMC 772 807 4% 6% 12 -inch (28nm)
4 GlobalFoundries 485 554 14% 15 -20% 12 -inch (specialty)
5 SMIC 521 616 18% >20% 8-, 12 -inch
6 Hua Hong 347 493 42% 10 -15% 12 -inch (specialty)
7 Powerchip 337 358 9% <5% 8-inch
8 VIS 243 253 4% 10 -15% 8-inch (<0.18um)
Tower
9 220 230 5% <5% 8-inch
Semiconductor
10 DB HiTek 130 140 8% 5-10% 8-inch
Source: DIGITIMES Research, March 2022

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Who dominates the global semiconductor market?

The semiconductor industry with a sophisticated division of labor has seen a rapid evolution of more than
60 years, during which the global capital market also has played a key role. The industry’s development
is a very complicated one, from either a political or economic point of view. We can observe and analyze
the global semiconductor market of US$555.9 billion through different dimensions beyond the industrial
output value. US brand vendors including Intel, TI, Nvidia, AMD and Qualcomm contributed US$273.9 billion
of revenues, accounting for 49.3% of the global market and allowing US companies to remain the most
influential in the global market. Apart from Micron, almost all of them focus on logic chips and they are the
global market leaders.

The semiconductor market can be divided into two sectors: memory and non-memory. Memory products
usually contribute 35-40% of the global semiconductor market, with non-memory semiconductor products
including logic chips and control chips representing the rest. US-based Micron and Japan’s Kioxia are major
players in the memory market but Korean companies dominate the memory sector, which enables South
Korea to have 19.3% of the overall semiconductor market.

Although the memory market also has its own business cycle, buyers can adjust the memory capacity they
need according to pricing. This is different from logic and control chips with diverse characteristics. Though
dominating the memory industry, South Korea is striving to shore up its presence in IC design and wafer fab
sectors, with focus on logic ICs and contract chipmaking services. It hopes to seek a balance for its industry
that has been tilting towards memory.

Taiwan has established a strong foothold in the global semiconductor sector. Besides its unrivaled
manufacturing capabilities, Taiwan also has remarkable success in the IC design sector. Leveraging rising
demand for alternatives to imports, Taiwan’s IC design houses started with developing chipsets for PC,
power management ICs, and driver ICs in the 1990s. MediaTek was founded in 1998 with an even stronger
ambition. Taiwan-based IC design houses and IDMs such as Winbond, Macronix and Nanya contributed
sales amounting to US$53.9 billion, accounting for 9.7% of the global total, with Taiwan sitting in third place
in the global IC design rankings.

Led by STMicroelectronics, NXP, and Infineon, European manufacturers represent 8.5% of the global
market share. Automotive chips will be the strategic products for all automotive players to cash in on
future business opportunities. European manufacturers have undertaken relatively less capacity expansion
in the past few years. Will they adhere to Europe’s own way or invite TSMC to construct fabs in Europe?
The decentralization of semiconductor ecosystems could become more pronounced. The manufacturing
structure with Asia as its hub over the past decades will break up towards a localized and diversified
landscape.

Japanese manufacturers had their golden period during the 1980s and 1990s. Renesas, Kioxia, Rohm and
IC design house Socionext reported total revenue of US$36.7 billion, accounting for a moderate 6.6% of the
global market. Can Japan make a comeback? The partnership with TSMC to build a fab in Japan is the initial

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step, and Japan’s souring relationship with South Korea seems to be pulling Japan closer Taiwan.

The emerging market forces that deserve more attention are undoubtedly coming from China. Demand
from China accounts for 60% of the world market, since more than half of the electronic products are pro-
duced there. Though China’s semiconductor industry started quite late, there has been remarkable growth
propped up by the government support, such as the “Big Fund.” It has a lengthy list of IC design houses,
but most of them have little influence in the market. It is estimated that revenues from Chinese IC design
houses that are outsourcing chip production with meaningful sales volumes were US$25 billion. Adding an-
other US$9 billion from the IDM sector made China the sixth-largest semiconductor supplier next to Japan
in 2021, with a global market share of 6.1% － a figure close to what SMIC president Zhao Haijun had de-
scribed as China’s chip self-sufficiency status.

The statistics more or less reflect intertwined relations of the IT industry under the impact of industrial
co-opetition and geopolitics.

Distribution of global semiconductor industry sales of US$555.9 billion in 2021

US China Taiwan Japan South Korea Europe Other

US South Korea Taiwan Europe

Manufacturing
Semiconductor Service
Brand
53.9B 47.2B
107.1B
9.7% 8.5%
273.9B 19.3% IC Design, 45
IC Design, 0.7
49.3% IDM, 47
IDM +others, 9

Japan China
34B
6.1%
Fabless, 25

Memory, 105 IDM, 35 IDM, 9

IDM, 159 Fabless, 115
IDM, 2.5
Source: DIGITIMES Research, March 2022 ICDesign, 2 IC Design, 1.7 IC Design, 0.6

South Korea’s ambition and weakness

The output value of South Korea’s semiconductor industry is comparable to the size of Taiwan’s, but
greatly differs in structure. More than 90% of the output value of the Korean semiconductor industry is
contributed by wafer fabs, with a high concentration in memory chip manufacturing. Although the South
Korean government and even Samsung have introduced many incentives trying to rejuvenate the industry,
they haven’t achieved much. The failure can be largely blamed on the business culture of South Korea,
where many Korean IC design houses cling on to the ecosystems of chaebols. These IC designers can hardly

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survive without business from these conglomerates. But South Korea’s semiconductor industry did emerge
victorious in a few cases of transitions thanks to the daunting investments by the conglomerates.

South Korea’s semiconductor manufacturing industry began in the early 1980s. Lee Kun-hee, the
second-generation chairperson of Samsung, ignored internal resistance and invited a group of top-notchers
from the US to join in the development of DRAM. During the same period, Hyundai Electronics, the
predecessor of SK Hynix, also entered the competition in 1983. Both companies contributed a combined
revenue of US$105 billion, accounting for more than 90% the revenues of the entire Korean semiconductor
industry in 2021.

Samsung has been the world’s largest memory manufacturer since the mid-1990s, maintaining a global
market share of around 40%. Samsung has been the leader thanks to its bold strategy of penetrating
the market after the financial tsunami in 2008. In the wake of the financial disaster, Taiwan’s memory
manufacturers incurred massive losses and ran up debts of as much as NT$400 billion. Among the memory
manufacturers at that time, Samsung was one of the few that could up the ante. According to historical
records, Samsung’s production capacity increased by 36% and 23% in 2007 and 2008 respectively, which
was similar to TSMC’s strategy of aggressively expanding capital expenditure after 2009. This also explains
why Samsung and TSMC have a leg up on other players in memory and wafer businesses respectively.

But the loss-making Hynix was not as lucky. It enlisted investment from SK Telecom, and only started a
turnaround after changing its name to SK Hynix in 2012. After acquiring Intel’s NAND division in early 2022,
it has become the world’s second-largest NAND vendor, and unshackled itself from the unhealthy reliance
solely on DRAM.

However, unlike Japanese players that embraced both equipment and materials when they embarked
on the road of semiconductor half a century ago, South Korean players were relatively weak in materials
and equipment and suffered bans on the export of hydrogen fluoride by the Japanese government in July
2019. The trade bans motivated South Korea’s active development of materials and equipment, which
now contributes 8% of the country’s semiconductor production capacity. Unlike Taiwanese firms that are
collaborating with Japanese partners, South Korean companies are more or less fighting alone.

The Chinese always assert that the Korean Peninsula is the bridge or gateway of East Asia. Certified by the
United Nations as a developed country, South Korea is ushering in a golden era of unprecedented national
strength that has been rarely seen in 4,000 years of its history. Today, the Korean industry is still under
risks from neighboring countries. Taiwan and Japan could complement each other in an alliance that could
unseat South Korea’s leadership in some sectors, or form significant obstacles to South Korea’s further
advancements in wafer manufacturing capabilities. However, China’s approach of developing strategic
industries with national capital support is almost a duplicate of South Korea’s model. For South Korea, the
biggest threat is actually coming from China, rather than Taiwan or Japan.

South Korea is now on its own. Samsung has set a strategic goal of becoming the global leader of
semiconductors by 2030. With neighbors lurking around, South Korea’s fate remains unknown.

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Samsung semiconductor goal and strategies for 2030

Goal: To become global system semiconductor leader by 2030

 memory
Non Purchase EUV
technology R&D equipment Build foundries

Invest KRW 171 trillion over a 12-year period starting from 2019

Source: Company; compiled by DIGITIMES Research, August 2021

The inevitable Taiwan-Japan alliance

The US-led trade sanctions on Russia in the wake of its invasion of Ukraine are likely to push Russia closer to
China, regardless of the outcome of the war. The new Cold War is gradually taking shape. South Korea has
been undertaking a “dual allegiance” strategy, swinging between China and the US. In the aftermath of the
just concluded presidential election, is South Korea going for new pro-US policies, or is it to continue Moon
Jae-in’s pro-China policy and keep maneuvering between China and the US?

Marking a deterioration in Tokyo-Seoul relations was Japan’s imposing a ban on the export of three
semiconductor chemical materials to South Korea in July 2019, which was triggered by the disputes over
comfort women. Besides the historical hostility, the drastic changes of the industrial and economic relations
among Taiwan, Japan and South Korea are also key factors in re-shaping co-opetition among them.

When South Korea hosted the 1988 Seoul Olympics Games, South Korea’s per capita income was 20% of
Japan’s. By the time they co-hosted the World Cup in 2002, South Korea’s per capita income had reached
33% of Japan’s. In 2020, the figure rose to even 80%. Furthermore, economists have predicted that both
Taiwan and South Korea may surpass Japan in terms of per capita income by 2028. Japan’s global ranking of
GDP will continue to drop and may be surpassed by India and Germany in 2030. The aging Japan is unlikely
to work with the historically hostile South Korea and China, and it will not be on an equal footing in its
relations with the US. Taiwan, on the other hand, is presenting itself as the perfect partner for Japan, with
complementary relationships.

On top of that, without top-notch process technology, the Japanese semiconductor industry needs
strategic partners like TSMC. Japan’s automotive industry needs to build a complementary mechanism in
its collaboration with Taiwan in the next stage of new products. As a traditional industrial power with a
strong foundation, Japan is not relying unilaterally on Taiwan. Japan is far superior to Taiwan in materials,
equipment and image processing technologies. In-memory computing will be an advanced technology
sector for bilateral partnership. Since Sony and Denso are TSMC’s primary partners in investment project in
Kumamoto, we can foresee that image processing technology and automotive semiconductors should be
the major sectors for Taiwan-Japan cooperation at the initial stage.

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When the epidemic was still raging in March 2022, Kazuhide Ino, a board member of Rohm, a Japanese
specialist in power semiconductors, visited Taiwan. Besides discussing collaboration with TSMC, Rohm talked
to Delta Electronics, a leading Taiwanese manufacturer of power supply, about deepening cooperation in
the compound semiconductor sector. Olivia Liao, general manager of Rohm Taiwan, said Japan used to focus
on the needs of its domestic industries, but now it must diversify its overseas industrial partnerships. Delta’s
achievements in the application of green energy, automobiles and compound semiconductors are very
impressive, which has motivated Rohm into seeking strategic overseas partnership with Taiwanese firms.

So how should Taiwan address changes in the macro environment. Politico-economic issues have indeed
become high on the agenda of Taiwan, whose people were not familiar with these in the past. In the wake
of the Russia’s invasion, Ukraine’s vice premier called on Taiwan-based Asustek – which has a high market
share in Russia’s high-end notebook market – to withdraw from the Russian market. Taiwanese businesses
can expect to find themselves more often in situations where they are pressured into taking sides in the
future.

Can China come from behind and win the race?

Before commenting on the intrinsic strength of China’s semiconductor industry, we must have an elaborate
study on China’s semiconductor market and industrial structure. According to the Semiconductor Industry
Association (SIA), the total output of the global semiconductor market in 2021 was US$555.9 billion, up
26.2% from 2022, of which US$192.5 billion was generated from the Chinese market, accounting for 34.6%
of the global total. However, this figure refers to the sales to local Chinese companies plus sales into China’s
domestic market, excluding the demand brought by foreign companies assembling diverse products such as
notebooks and mobile phones in China.

According to China’s General Administration of Customs, the country shipped 220 million notebooks and
950 million handsets in 2021. The export-driven demand for semiconductors was characterized as dynamic
demand, as compared to the rigid demand of local manufacturers and markets in China. China’s domestic
market normally accounts for one fourth of the global total, and including the demand of exporting
manufacturers such as Lenovo, Xiaomi, Oppo and Vivo, China’s rigid demand is estimated at 34.6% of the
global market. We could come up with more accurate data if we take into accounts the semiconductor
demand from electronics manufacturers such as Foxconn, Quanta, Compal, Wistron and Pegatron and
compare it to the export figures of Taiwan, South Korea and components distributors.

So how much is the self-sufficiency rate as a proportion of China’s rigid demand? According to previous
definitions, the IC design market shares should be estimated based on the combined shares of IDMs
and fabless IC design houses. Therefore, the revenue of China’s IC design industry should be added up
with the output value of local IDMs such as Wuhan Xinxin, but exclude that of foreign companies such
as TSMC, Samsung, Hynix, and local wafer foundries such as SMIC. In addition, IC design companies with
annual revenue of less than US$100 million are “negligible” in the market, so it is estimated that the sales

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value of China’s local semiconductor industry amounts to merely about US$10 billion. Thus, the actual
self-sufficiency rate is lower than what it seems. This is also the assessment of SMIC president Zhao Haijun.

China is the main export market for Taiwanese and Korean semiconductors, and local firms generate 34.6%
of the global output, plus 25% of value added exports in processed products by foreign companies. China
hopes to participate in the global top-four race leveraging support of its domestic market demand along
with the government’s Big Fund.

As mentioned earlier, the core of the semiconductor industry is constituted by IDMs and fabless IC design
companies. On top of that, EDA design tools and silicon IPs are indispensable to complete the design work.
The most important EDA design tool providers globally are Synopsys, Cadence and Mentor, and the most
influential silicon IP provider is Arm. They are all US-based players. Facing China is an uphill battle trying to
unseat these market leaders.

Even though each IDM has its own fabs, considerations of technology, production scale, and operating
efficiency have sent Renesas, Infineon and NXP embracing a fab-lite approach. Dedicated to high-end
business opportunities, Samsung has also contracted UMC for the manufacturing of some image processing
and related chips. The fifth and sixth largest IDMs – China-based SMIC and Huahong – lack cutting-edge
processes technologies, despite significant growths in 2021. China’s packaging/testing sector is relatively
closer to the international leadership with a 25% of the global market, compared to Taiwan’s 58%.

It is estimated that the revenue of wafer foundry industry reached US$106.7 billion in 2021, while the
backend packaging/testing reported revenue of US$39.7 billion. China could have a chance to come closer
to the leading pack if Chinese players put in more hard work. But it is far from being easy for China to
overtake them.
Estimations about global top 10 foundries in 2021

Global top 10 foundries 2021 Revenue 2021 Market Share

2020 2021 (US$100 million) YoY 2020 2021

1 TSMC TSMC 568.3 25% 53% 52%

2 Samsung Samsung 187.7 27% 17% 17%
3 UMC UMC 76.3 26% 7% 7%
4 GlobalFoundries GlobalFoundries 65.5 35% 6% 6%
5 SMIC SMIC 54.4 39% 5% 5%
6 Hua Hong Hua Hong 29.1 51% 2% 3%
7 Powerchip Powerchip 23.4 52% 2% 2%
Tower
8 VIS 15.7 40% 1% 1%
Semiconductor
Tower
9 VIS 15.1 19% 1% 1%
Semiconductor
10 DB HiTek DB HiTek 10.2 29% 1% 1%
Total 1,045.8 28% 95% 96%
Source: DIGITIMES Research, March 2022

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Colley Hwang, president of DIGITIMES, is a tech industry analyst with

more than three decades of experience under his belt. He has written
several books about the trends and developments of the tech industry,
including Asian Edge: On the Frontline of the ICT World published in
2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding
published in 2020.

Hwang is also a columnist for “Colley & Friends” on DIGITIMES

website in Chinese. The English translation can be seen on “DIGITIMES
perspective,” of DIGITIMES Asia.

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