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The Rise of Chips Factories

Over the weekend world's largest semiconductor company, TSMC opened its first plant in Japan. This is not only significant from the company or county perspective but from the global aspect as well. It is the first chip factory to come online in the post-pandemic era.

Along with this Japan announced $4.8Bn support to TSMC for its second plant. But every country that aspires to bring chip manufacturing to their backyard has not been able to have a smooth ride. TSMC itself had to delay its USA plant by a couple of years.

Yesterday US commerce secretary said that companies have asked for $70Bn support under the CHIPS Act. And the country aspired to provide 30% of global chips supply by 2030 that is fully locally manufactured.

Within the next few years, the landscape of semiconductor supply will certainly be very different from what it was in 2019. But whether all the countries or companies will be able to capitalise in a way that the current market shares change is difficult to say.

The biggest risk that industry would face in this transition period would be China losing its development pace due to various restrictions and taking some desperate countermeasures or military action on Taiwan to disrupt the progress of others.


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