Speaking ahead of SEMICON Taiwan 2025, Globalwafers chairperson Doris Hsu said competition in semiconductors is shifting from process nodes and capacity to control of critical materials and supply-chain resilience, which she argued will decide future industry leadership.
She warned that even with 1nm or 2nm technology, production could be crippled without access to chemicals, polishing powders, or rare gases. "What will choke the industry in the future is not process technology or output, but materials access," she said, noting that firms worldwide are racing to secure these inputs.
Supply chains as strategic weapons
Hsu said the semiconductor supply chain has moved from globalization toward localization and regionalization, with fabs now seen as strategic leverage in international negotiations. Capacity allocation, she added, has become not just a business choice but a geopolitical bargaining chip.
Taiwan's central role, led by TSMC, ASE Holdings, and MediaTek, has been underscored during crises, from COVID-19 and earthquakes to the Russia-Ukraine war. Shortages of auto chips and components forced buyers to reassess Taiwan's weight in supply chains. The response was a "Taiwan +1" strategy, urging firms to add overseas capacity to reduce single-point risk.
Hsu argued that "Taiwan +1" is no longer sufficient. Governments now want Taiwanese chipmakers to relocate capacity, bring technology, and lock in material supplies. "Beyond capacity and technology, the next battleground is critical materials," she said.
She warned that future bottlenecks will extend beyond process and packaging to basic raw inputs. Japan's 2019 export curbs on South Korea, covering fluoropolyimide, photoresists, and hydrogen fluoride, nearly paralyzed its industry. The Russia-Ukraine war then sparked fears over rare gas shortages, further highlighting material risks.
SiC, GaN, and the search for alternatives
Hsu highlighted silicon carbide (SiC) and gallium nitride (GaN) as next-generation materials. SiC delivers superior heat dissipation, while GaN is in high demand for high-frequency and high-voltage applications in EVs, 5G, and AI chips. But supply is highly concentrated: China controls over 90% of gallium output, which requires export permits. While flows are currently stable, any policy shift could disrupt the industry.
She said this concentration is why countries are pursuing "non-China, non-single-source" strategies, with Taiwan viewed as a key partner.
From just in time to just in case
Hsu said the supply chain model has moved from "Just in Time" efficiency to a localized "Just in Case" framework focused on security and resilience. The shift lowers risk but raises costs and reduces efficiency. Supply chains now must also address carbon reduction, recycling, and net-zero goals, making resilience costlier but unavoidable.
Looking forward, she urged joint efforts between government and industry to secure Taiwan's semiconductor supply chain.
For choke-point materials, she called for state policies and subsidies to boost local production. She emphasized developing recycled chemicals such as photoresist and isopropyl alcohol (IPA) to cut reliance and meet ESG goals, and urged strategic partnerships with allies to ensure diversified and stable supply.
Hsu concluded that Taiwan's semiconductor industry must be not only strong but also stable and sustainable. That requires sustained R&D, policy backing, and vigilance over vulnerabilities. Resilience, she said, rests on balancing cost with efficiency: only through both self-reliance and international cooperation can Taiwan maintain its place on the global stage.
Article edited by Jack Wu
