Backing Asia’s chip champions in a riskier world

SEMICONDUCTORS are the hidden engine behind the global economy, powering everything from electric cars to artificial intelligence (AI). Asia, home to some of the world’s leading chipmakers, is at the forefront of this technological revolution. However, the region’s semiconductor industry faces a growing array of challenges that could threaten its future capacity and viability. We explore here the dynamic landscape of Asia’s chip industry, the risks it faces, and the strategies needed to ensure its resilience.

Driving innovation and growth

Asian economies are proud of their prominent positions in the technology supply chain. Taiwan, home to TSMC – the world’s largest chipmaker – is at the forefront of cutting-edge process technologies crucial for AI. With AI demand surging, its semiconductor industry is poised for explosive growth, with TSMC predicting AI-related revenue will increase 45 per cent annually over the next five years.

Mainland China, the world’s largest semiconductor market, is rapidly advancing its industry with huge government investments to serve growing domestic needs and reduce reliance on imported components. South Korea is the global market leader in memory chips and the second-largest semiconductor producer in the world overall. Japan, a pioneer in the sector, is also steadily rebuilding its semiconductor manufacturing capacity, with the government devoting at least US$65 billion to this purpose.