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Taiwan to maintain market share as chip shortage lasts through 2022

South Korea and China expected to make modest gains in market share

Taiwan's semiconductor industry to maintain market share. (Pixabay photo)

Taiwan's semiconductor industry to maintain market share. (Pixabay photo)

TAIPEI (Taiwan News) — Taiwan’s share of the global semiconductor manufacturing industry is predicted to remain constant over the coming years, as a supply shortage for the critical technology continues.

Taiwan’s share of the foundry market was 67 percent in 2020 and is predicted to increase to 68 percent by 2025, according to a report by the media arm of IDG Research, ARN. The research firm predicts the chip shortage will continue well into 2022, mainly due to the onset of the Omicron variant of COVID-19, which may slow manufacturing again.

However, a recovery is expected to begin in the second half of the year. This will likely lead to an acceleration in the global market next year.

The growing revenues of fabless foundries and increasing foundry capacity in Asia Pacific are two key factors that are driving market change, per IDG. Taiwanese firms have poured increasing amounts of capital to building new fabs both at home and abroad over the past two years.

That trend looks set to continue with Taiwan Semiconductor Manufacturing Company (TSMC) this month announcing it will invest over US$40 billion (NT$1.1 trillion) to maintain its leading position in the industry. TSMC currently makes up just over half of the global foundry market.

Despite Taiwan’s comfortable lead though, IDG predicts both South Korea and China will gain in market share. By 2025, it claims, South Korea’s share will go from 16 to 19 percent, while Chinese companies will increase from 12 to 15 percent.