2030 will inaugurate a "Silicon Era" of quarter-finals competition among industrial nations, as applications such as electrical vehicles, connected cars, and artificial intelligence (AI) are advancing at exponential speeds.
From the supply side, many industrial nations are increasing investments in building up their semiconductor supply chains amidst the US-China Trade War. However, those producing semiconductors on their lands would protect their semiconductor industries. Under the pressure of geopolitical powers, those companies will have to deal with increased costs and competition after 2025, when dozens of new fabs start to operate and churn out chips.
However, it takes several years for companies to plan for new fabs and obtain orders to be ready for processes for mass production. We estimate a meaningful change to the global supply chain architecture to occur in 2030. Can TSMC maintain its leadership by then? What is the strategy for Samsung to play catchup? Intel's high-profile expansions playing the same tune with the US Government on de-globalization and getting the bulk of the CHIPS Act subsidy would be the key to winning the race.
Winston Churchill, who led Britain through the difficult period of World War II, once said Britain's national strategy was to avoid the occupation of the Low Countries by Germany and Russia. In the new era, industrial nations require a new national industrial strategy, and semiconductors are undoubtedly the most critical.
Taiwan is situated in the first island chain and the technology island chain. We are sitting at the front row witnessing the change of the world, and the information communications technology (ICT) supply chain of Taiwan would play a vital role in that change.
The world is more complicated than before
By 2030, the annual sales volume of EVs worldwide will reach more than 30 million units. Now that China produces 60% of the world's EVs, could EVs, which can collect all kinds of data, be the spearhead of China's penetration into the Western market? Can EVs play the role of the Trojan Horse to threaten cybersecurity?
Traditional automakers in the US, Germany, and Japan will face supply chain restructuring. There will be a limp supply-demand imbalance for cutting-edge chips, but can the ASEAN countries build their own ICT supply chains without the support of Taiwan's supply chain?
Taiwan has become a partner of many countries, but at the same time, it is also a worry. I want to emphasize Taiwan's value as an "anchor" in the global industrial and economic order. When Taiwan is stabilized, the world will be stabilized. "The supply side is more important than the demand side," said Akira Amari, a member of the Japanese Diet and former Minister of Economy, Trade, and Industry during his visit to Taiwan.
By 2035, there will be 380 million more individuals under the age of 39 in India than in China, according to my Indian friends. Will the future metaverse business opportunities be dominated by Americans, Chinese, or Indians? Although the number of employees in Taiwanese companies' factories is decreasing due to the benefits of smart manufacturing, Taiwanese companies still need engineers and workers, and they also need to create value with local partners overseas.
A decentralized production system can alleviate the risk of over-concentration in Taiwan, South Korea, and China. But will over-investment have an impact on the semiconductor industry? We all understand the reasoning behind getting into the market during the crisis, but will it be like what Jensen Huang said: "We may be swimming in empty fabs"?
I want to thank Taiwan's CommonWealth Magazine, the local publisher of Chip War's Chinese edition, for inviting me to explore the semiconductor industry's future from an Asian perspective. I will take the year 2030 as a benchmark and explore some of the key changes in the world before 2030.
