How is the trade war between the US and China affecting Taiwan, Japan and South Korea? Why are semiconductors and 5G becoming the key issues of their brawls? 5G technologies are bringing revolutionary changes to the ICT industry's operation and ecosystem. Apart from the economic benefits, they have strong implications in terms of many sensitive issues, such as data and national security. This is the reason why both the US and China are taking the matter seriously.
Semiconductors are the key driving the ecosystem behind the Internet. High-speed calculation and mass storage all need support from semiconductors, which as a result are the foundation of the ICT industry. The US-China trade tensions have recast semiconductor giants South Korea, Taiwan and Japan back to the center of the stage. South Korea currently has the largest memory industry worldwide, while Taiwan's foundry sector is the global production center of top-end chips. Although the trade war is between the two superpowers, the battlefields are actually in Taiwan and South Korea.
In order to shed light on all these latest developments, I've written my eighth book of my career in the ICT industry: Asian Edge: On the Frontline of the ICT World. Although the focus of the ICT industry may not necessarily shift entirely from the West to the East, the roles of the ICT industry players in the East are definitely growing much more important.
The book also describes how Japan, Taiwan and South Korea, all located on the first island chain at the edge of Asia, have been able to reach where they are right now and how they have gained competitiveness making them stand out from the US and China. This book represents an Asian perspective and an Asian researcher's view on the ICT industry.
In 1985 - the year Microsoft released Windows, and the first year of the PC era - I returned to Taiwan to participate in the planning of the local ICT industry and witnessed the PC industry's booming growth while working at Hsinchu Science Park. At the time, I worked with colleagues reporting to ICT industry pioneers such as KT Lee, Stan Shih and Morris Chang, and saw substantial OEM orders come knocking on the doors of Taiwan's ICT industry in the 1990s, creating the heyday that pushed Taiwan to the top of the global ICT manufacturing sector.
After year 2000, the worldwide ICT industry's focus has turned from PCs to mobile communication devices, and China's industries had also grown strong after 20 years of economic reform. With its strong domestic demand, demographic dividend, capital market and investment from national capital, China has won out in nearly all core industries - from petrochemical, steel, shipbuilding and automobile to IT applications such as panel, solar, car-use battery - they have made efforts into developing.
What are the keys to China's success? In the past 30 years, I have made trips that have taken me to almost 100 cities in China in order to be at the frontline to understand the business models and the influences of Taiwan IT players moving production to China's Pearl River Delta, Yangtze River Delta, Chengdu and Chongqing. My experiences living in the US for 18 months and as an exchange student in South Korea for two years also helped give me a clear understanding of how Taiwan and South Korea have been caught between the US-China row.
As a researcher studying the relationships between the industries in the US and Asia, a witness of the global ICT industry's transformation, I felt responsible to provide the information that I have of the frontline to people around the worldwide and to share my views through support from historical facts.
During the past 18 months, I have visited India, Japan, South Korea, China, UAE, Iceland, Netherlands, Vietnam, the Philippines, Malaysia, Armenia, Belarus, Estonia, Latvia, Lithuania and Finland - a total of 16 countries. I have seen changes to the world, the critical roles that South Korea, Taiwan and Japan are playing in the global market, and the reaction of the supply chain to the competition between the US and China.
(Note: This is part of a series of articles by Digitimes president Colley Hwang on the latest developments of the IT industry in the wake of the US-China trade war.)