TAIPEI, April 23 (Reuters) - Taiwan's key semiconductor
industry has years of growth ahead of it with no worries about
oversupply despite a massive capital investment programme and
only a few competitors in the next decade or so, a senior
government minister said on Friday.
Kung Ming-hsin, the head of Taiwan's economic planning
agency, the National Development Council, told Reuters the
business opportunities presented by the global transformation to
a digital economy were "very, very enormous".
Kung also sits on the board of Taiwan Semiconductor
Manufacturing Co Ltd (TSMC) as a
representative of the largest shareholder, the government's
National Development Fund, which holds around 6% of the stock of
the world's most valuable semiconductor company.
He said between now and 2025, Taiwan companies have planned
more than T$3 trillion ($107 billion) in investment in the
semiconductor sector, citing expansion plans from chip giants
including TSMC and Powerchip Semiconductor Manufacturing Corp
"Once they are built, Taiwan's competitors in semiconductors
in the next decade will be very few," Kung said in an interview
in his office building, which overlooks the presidential office.
Taiwan's semiconductor firms are ramping up production to
tackle a global chip shortage, which has affected everything
from carmakers to consumer products, and meet booming demand
following the work-from-home trend during the COVID-19 pandemic.
Soaring demand is set to continue, driven by 5G, artificial
intelligence and electric vehicles, Kung said.
"In the next decade or even longer there won't be oversupply
for semiconductors," he added, when asked if the massive
investment plans could have a downside.
Taiwan is currently in the grip of its worst drought in more
than half a century, but Kung said the impact on chip firms was
limited at present, citing the amount of water they are able to
recycle and the location of their main factories in Hsinchu in
northern Taiwan, and in the island's south.
"These two places are okay at the moment. So the impact on
semiconductors is not bad."
Still, Taiwan does face other challenges, not least from
China where President Xi Jinping has made semiconductors a
Kung named Samsung Electronics as Taiwan's most
serious competitor and also able to match TSMC's advanced
chipmaking, but said U.S. tech restrictions had for now blunted
the Chinese threat.
Intel Corp - both a TSMC client and competitor -
last month announced a $20 billion plan to expand its advanced
chip making capacity.
Kung said there was perhaps room for TSMC to cooperate with
Intel, but "what's important is really how you upgrade
To that end, the government is helping the industry develop
the next generation of semiconductor manufacturing technology
like 1 nanometre and beyond with funding support and talent
recruitment programmes in the works, he added.
($1 = 28.1070 Taiwan dollars)
(Reporting by Yimou Lee and Jeanny Kao; Additional reporting
and writing by Ben Blanchard; Editing by Shounak Dasgupta and