Taiwan's status as a global powerhouse in the semiconductor industry could be undermined by labor shortages, but talent from India could provide a solution.
US President Donald Trump has repeatedly threatened to impose tariffs on Taiwan-made ICs in order to force manufacturers to invest and set up plants in the US. He has also claimed that many semiconductor companies have already committed to investing in the US.
While it remains uncertain whether Trump's threats will prompt semiconductor firms to leave Taiwan, the Taiwanese government is still adhering to its policy of strengthening the country's status as a global tech hub, with a strong focus on semiconductors and AI.
However, industry observers have pointed out that the declining birthrate and aging population are some of the major problems that Taiwan is facing, apart from a lack of natural resources.
Labor shortage a serious problem
In a bid to address the manpower shortages in Taiwan's AI and semiconductor sectors, the National Development Council (NDC) has analyzed the needs of Taiwanese makers and the global distribution of talent, with the results showing that Silicon Valley in the US and Bangaluru in India are the two regions with the most AI and semiconductor human resources. For example, the state of Karnataka, of which Bengaluru is the capital city, has 250 engineering colleges and produces more than 100,000 graduates in engineering-related fields every year.
The NDC will give priority to attracting Indian students to live and work in Taiwan in the future.
According to information released by the NDC, the government has made plans to establish six major tech regions in Taiwan. Two of them are Silicon Valley-like hubs in northern Taiwan (covering Taoyuan, Hsinchu, and Miaoli) and in southern Taiwan (covering Chiayi, Tainan, Kaohsiung, and Pingtung).
Currently, the total output of businesses in Taoyuan, Hsinchu, and Miaoli is about NT$9.8 trillion (approx. US$299.22 billion), accounting for about 23% of the entire country's. Employment in the three areas totals 1.93 million people or about 16% of the country's entire workforce. They form a major semiconductor cluster with five science parks.
Among the country's three major science parks overseen by the National Science and Technology Council (NSTC), the Southern Taiwan Science Park (STSP) currently has the highest output value, mainly due to the huge increase in TSMC's sales from the site. Since there is still a lot of land available for industrial investment in southern Taiwan, the city and county governments in the region have all committed to helping solicit investments by offering preferential terms.
Priority given to AI software
The NDC stated that the establishment of a "Silicon Valley" in southern Taiwan could connect the surrounding industrial, science, and technology parks, forming a semiconductor hub with wafer foundries, packaging, testing, and 5G application service sectors. An AI industry zone will also be set up in Shalun, Tainan, for smart manufacturing.
The southern "Silicon Valley" will also strive to promote cooperation between academics, research institutions, and industry associations to strengthen the application of AI in small and medium-sized enterprises.
Taiwan's Minister of Economic Affairs, Jyh-Huei Kuo, recently said he hopes Taiwan will surpass Japan and South Korea in AI software and eventually enter the top three in Tortoise Media's Global AI Index. Proposals have already been made to set up AI software parks in six major cities (Taipei, New Taipei, Taoyuan, Taichung, Tainan, and Kaohsiung).
Article translated by Rodney Chan
