Taiwan semiconductor industry faces challenges in IC design and key components

Industry experts and leaders from TSMC and MediaTek have highlighted critical vulnerabilities within Taiwan’s semiconductor ecosystem despite its manufacturing dominance. While Taiwan maintains a strong foundation in wafer fabrication and advanced packaging, concerns persist regarding weaknesses in IC design, system architecture, and software capabilities.

TSMC noted that while over 80% of the AI server cabinet supply chain is located in Taiwan, the division of system tasks is largely dictated by international clients rather than local firms. As AI chip power consumption rises toward 600kW, the industry must shift toward integrated solutions involving cooling and power modules. MediaTek acknowledged that while SoC design has improved, Taiwan remains weak in the top-tier software services and application ecosystems.

Furthermore, the semiconductor equipment sector faces hurdles with component autonomy. Hansem Technology reported that although 80% of equipment parts are localized, the remaining 20% of critical components from overseas account for approximately 70% of total equipment costs. Challenges such as talent recruitment competition with chip designers and the rapid pace of technological evolution in advanced packaging also remain significant obstacles to long-term resilience.