For the first time in the past 20 years, Taiwan’s IC design group published an industry white paper. MediaTek chairman Cai Mingjie served as the general consultant, and joined hands with major manufacturers such as Novatek, Wonderview, and Realtek to warn that Taiwan’s IC market share will be surpassed by China in 2026. , After seeing those crises in the platform factory, industry analysts pointed out that in addition to strategy and lack of personnel, Taiwan’s R&D projects and dividend policy are even more under-the-table issues. With the future three major trends, high-speed computing (HPC), artificial intelligence ( AI) and automotive electronics (Auto), “Taiwanese factories have limited R&D investment in the new field of IC, and have no right to speak at all.”
Taiwan’s IC market is in crisis, what MediaTek Tsai Mingjie saw, analysts say 2 key points.File photo
The rise of the Sino-US trade war in 2018 and the disruption of the global supply chain caused by the new crown pneumonia epidemic in 2020 have allowed Taiwan to benefit from the order transfer effect one following another. , In the technological war, two sets of standards were used to allow Taiwanese factories to benefit from each other. However, following enjoying the good times of “de-sinification”, a Russian-Ukrainian war in February 2022 detonated the “de-Taiwanization” crisis. TSMC’s establishment of overseas factories is an important turning point.
Taiwan’s IC design industry will reach a market share of 22% in 2021, but it will drop to 18% in 2022 as the epidemic dividend fades and terminal products enter inventory adjustments. In the future, under the increasing geopolitical risks, the policy thinking of the United States, Europe, China, Japan, and South Korea on the development of semiconductors has been upgraded from the previous industry to the national strategic level. The import substitution model that makes Taiwan’s IC design industry good at will face the competitive pressure of Chinese industry.
In 2022, the revenue of Taiwan’s IC design industry is estimated to be regarding 40 billion US dollars, which is a highly profitable industry with an average net profit rate of 20%, and it is firmly seated as the second largest industrial chain in the world. Taiwan’s semiconductor industry contributed 12% of GDP with 320,000 employees, of which the IC design industry contributed 29% of semiconductor revenue and 2.4% of GDP with only 52,000 people. In the semiconductor industry, it is second only to the 6.8% of the foundry
Five companies headed by MediaTek proposed in the white paper released this year: 1. Plan and promote the semiconductor strategy at the national level; 2. Adopt proactive budgeting to strengthen the driving force; 3. Expand the cultivation of IC design talents and win overseas 4. Re-examine the policy of foreign businessmen to set up R&D centers in Taiwan; 5. Strengthen the mastery and layout of IC design core technologies; 6. Assist the industry in consolidation and internationalization to promote industrial upgrading and other suggestions.
However, senior analysts pointed out that the market share crisis of Taiwanese factories is due to their love and nature of being good at making quick money. Although major manufacturers have repeatedly claimed that their R&D investment has reached a new high and exceeded 100 billion yuan, but if you look closely at the R&D projects, you can find that the key trends that will really affect the industry in the next 3 to 5 years, such as high-speed computing, artificial intelligence, and semiconductor vehicles. Most of them are absent.
Some analysts pointed out that the high-speed computing and peninsula-leading advanced automotive markets have lasted for several years, but where is Taiwan’s IC design industry in the layout of main chips and other products? Whose problem is this?
The impact of R&D investment is actually more related to the dividend policy that shareholders are concerned regarding. The legal person also analyzed that the IC design industry has made a lot of money in the past two years. The high dividend policy has become a call to attract foreign investment. 70% of the profits are distributed to shareholders. In addition to interest rates, should we worry more regarding whether these companies do not make new investments, or are afraid of investing, which may lead to a slowdown in overall company growth.
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