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Taiwan’s Share to Decline in Semiconductor Assembly and Test Market: IDC

In a recent report by the International Data Corporation (IDC), Southeast Asia is projected to solidify its standing in the global semiconductor assembly and test market, reaching a 10 percent share by 2027. Meanwhile, Taiwan’s share in semiconductor assembly and test market is anticipated to decline to 47 percent in 2027 from 51 percent in 2022.
Semiconductor assembly and test locationsThe evolving landscape of geopolitics, technological advancements, and talent availability has led leading integrated device manufacturers (IDM) in the United States and Europe to increase their investments in the Southeast Asian market. This shift is causing significant attention redirection from China to Southeast Asia, particularly in Malaysia and Vietnam. These countries are expected to become pivotal players in the semiconductor assembly and test market in the near future.

In response to global geopolitical dynamics and to ensure supply chain resilience and security, many semiconductor manufacturers have been adopting “China + 1” or “Taiwan + 1” production strategies, redefining the global layout of the foundry and assembly/test industry. This strategic overhaul has led to a regionalized approach within the semiconductor industry chain.

Helen Chiang, Asia Pacific semiconductor research lead and Taiwan country manager, emphasized the profound impact of geopolitical shifts on the semiconductor landscape, stating, “Geopolitical shifts are fundamentally changing the semiconductor game. While immediate impacts might be subtle, long-term strategies are focusing more on supply chain self-reliance, security, and control. The industry operation will move from global collaborations to multi-regional competitions.”
Major industry players such as TSMC, Samsung, and Intel are strategically advancing in the United States, gradually asserting influence in the foundry sector, particularly in advanced processes. Despite challenges in developing advanced processes, China’s mature processes have seen rapid growth driven by domestic demand and national policies.

Based on production location categorization, China’s share of overall industrial areas is projected to increase to 29 percent by 2027, a 2 percent rise from 2023, while Taiwan’s market share is expected to decrease from 46 percent in 2023 to 43 percent in 2027. The United States is set to make gains, particularly in the advanced process sector, with its share for 7nm and below processes estimated to reach 11 percent by 2027.

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