The reason is clear.

Without semiconductors,

・AI servers

・Communications infrastructure

・Weapons systems

・Automobiles

・Industrial machinery

would all stop.

In other words, semiconductors are the foundational infrastructure of modern society.

The world’s leading-edge logic manufacturing is concentrated in Taiwan.

TSMC in particular has an overwhelming presence.

TSMC has

・The world’s most advanced nodes

・Enormous production capacity

・Major fabless customers.

For this reason, geopolitical risk in Taiwan is directly linked to the global economy.

The center of today’s semiconductor geopolitics is the competition between the United States and China.

The United States has imposed

・Export controls on advanced equipment

・EDA restrictions

・Export restrictions on AI chips, and more.

The aim is to curb China’s development of advanced semiconductors.

Export controls have a major impact on the supply chain.

Examples:

・A ban on exporting EUV equipment to China

・Export restrictions on AI chips

・Restrictions on advanced manufacturing equipment

As a result, the semiconductor industry is showing a tendency toward technology blocs.

National support for the semiconductor industry is increasing rapidly.

Representative examples:

・United States: CHIPS and Science Act

・EU: Chips Act

・Japan: Semiconductor support policies

・China: National semiconductor fund

The aim is to secure domestic manufacturing capacity.

The semiconductor supply chain is extremely complex.

For example, it is an international division-of-labor structure of

・Materials (Japan)

・Equipment (USA, Japan, Europe)

・Manufacturing (Taiwan, South Korea)

・Design (USA)

If any one part stops, the whole stops.

Semiconductor supply is also affected by natural disasters.

Examples:

・Earthquakes

・Water shortages

・Power outages

Semiconductor factories require

・Large amounts of water

・A stable power supply.

Semiconductors depend on

・Air freight

・Precision transport.

If international logistics stop,

・The supply of components

・Product shipments

come to a halt.

This problem became apparent during the pandemic.

In recent years, companies have been diversifying their supply.

Examples:

・Building fabs in the United States

・Attracting fabs to Europe

・Bringing manufacturing back to Japan

The aim is to secure supply stability.

Semiconductors are at the center of economic security.

Countries are strengthening

・Technology protection

・Export controls

・Investment restrictions.

Companies also need to take political risks into account.

Future focal points:

・Taiwan risk

・U.S.-China technology competition

・Competition in national subsidies

・Supply chain restructuring

The semiconductor industry has become an industry of technology + politics.

・Semiconductors are a national strategic technology

・Concentration in Taiwan is the biggest risk

・The U.S.-China semiconductor rivalry is intensifying

・Export controls are affecting the industry’s structure

・Countries are strengthening domestic manufacturing

1.Why are semiconductors a core technology for national security?

2.What impact does Taiwan’s semiconductor industry have on the global economy?

3.What are the main tools used in the U.S.-China semiconductor rivalry?

 

Column Supervisor: Koji Kakumoto (President, OTIS Co., Ltd.)

After studying abroad and working in planning and development at a trading company, he joined OTIS Co., Ltd. in 2011. While primarily working in the Corporate Planning Department, he has also served concurrently in manufacturing and technical divisions, and since 2018 has served as President, working to drive business growth and strengthen the organization.

 

This article is a general technical explanation intended for educational purposes and does not refer to any specific company, product, or technology.