Chip manufacturer TSMC is anticipated to keep its spot as the world’s largest foundry until at least 2032. The Taiwanese giant is currently in high demand thanks to the recent boom in AI hardware, fuelling its growth.
According to Yang Ruei-Lin at the Industrial Technology Research Institute (ITRI), Taiwan’s semiconductor industry will maintain its lead for almost another decade. While not entirely carried by TSMC, the latter plays a major role in pushing the industry forward. For example, in 2022, Taiwan produced 69% of the world’s cutting-edge semiconductors, followed by South Korea with 31%. This was when Intel hadn’t yet readied its sub-10nm nodes.
Today, thanks to some help from the U.S. government via the Chip Act, which aims to bring back research and manufacturing of leading-edge technologies to US soil, the country is expected to produce 28% of sub-10nm chips in 2032. The country has allocated $53 billion in incentives for domestic semiconductor manufacturing and research, of which $39 billion is provided as financial assistance. Back in 1990, the US produced nearly 40% of the world’s semiconductors, whereas it barely scraps 12% today.
Fortunately for Taiwan’s industry and security, even with such incentives, the US is only expected to make 28% of sub-10nm chips by 2032, with Taiwanese fabs counting for 47%. Seeing the growing geopolitical frictions, losing the lead in semiconductor manufacturing is an existential threat. For the time being, Taiwan doesn’t seem ready to let anyone take its spot, with TSMC set to debut N2 (2nm) node volume production in the second half of 2025.
That said, the clock is ticking for Taiwan as the nine angstroms (0.9nm) node, expected to arrive sometime in 2032, is where the lead may pass to the US or another country. Regardless of who will be on top come 2032, Taiwan has no choice but to participate in international cooperation as each country wants to secure some domestic manufacturing capacity for the rainy days. Interesting times ahead.
