It's been six generations since my great-great-great grandfather moved to Taiwan from the Chinese mainland, and I have been doing industry research in almost my entire career. I know that it is not only the semiconductors but also the entire ICT ecosystem where Taiwan can exert its influence globally.
In recent years, Silicon Valley has seen a growing cohort of Indian tech talent, some of whom run world-class tech firms. But what I hear is that there is only one Indian technology association in Silicon Valley, while the ethnic Chinese community has as many as 36 tech associations of different sizes.
The global notebook market increased from 158 million units in 2019 to 247 million in 2021, thanks to the work-from-home demand, and it will not be easy to surpass the 200 million-unit mark again after 2022.
There are many Taiwan-born CEOs and Taiwanese in key positions in Silicon Valley's major semiconductor majors. David Fedor, a Stanford University professor, suggested that the US provide more quotas for Taiwan students, but also called on Taiwan to re-establish its capability of making quick and correct decisions.
Larry Diamond, the co-moderator of a symposium that I took part in at Stanford University's Hoover Research Center, is known for his research on democracy in emerging countries. Once dubbed "Mr Democracy" by Time, Diamond criticized Taiwan for making conflicting semiconductor and energy policies. Of course, Mr Democracy is not an expert in nuclear energy, and a professor from Taiwan's National Tsing Hua University who was at the symposium gave him an appropriate response.
At a symposium at Stanford University, a professor called "Philip" came over to greet me, and it seemed that he knew me. I politely exchanged business cards with him. And it turned out that he is the famous Philip Wong who once served as TSMC's vice president of research for a short period of time after the foundry house's chief technology officer Jack Sun retired.
When Shinzo Abe asserted that "A Taiwan emergency is a Japanese emergency," many Taiwanese were grateful and deeply touched. Actually I don't think South Korea would be unscathed, as Taiwan is the source of supply chains in the semiconductor and ICT industries.
Most people don't think China will attack Taiwan in the next two years, but many believe the next 3-5 years during the third term of Chinese president Xi Jinping will be a high-risk period. But is Taiwan ready? Taiwan's annual defense spending is about US$19 billion, or 2.4% of its GDP, and some suggest it be increased to US$40 billion in the next five years, or about 5% of the GDP.
Issues that might be taken for granted in other countries may be matters of life and death in political discussions that don't allow any middle ground. Will 2024 see the last presidential election in Taiwan? If China sees zero economic growth, the likelihood of a military invasion of Taiwan will be even higher. On the face of it, Taiwan is in a difficult position with no room for maneuvering, but looking back on the past half-century, isn't that how Taiwan has survived? The more difficult the times, the more abundant and diverse the opportunities for development.
Controversies over its sovereignty have prevented Taiwan from having a clear national strategy. But who's at fault? Winston Churchill once said Britain's strategy for the past 400 years had been to avoid the Low Countries from falling into the hands of the great powers in Continental Europe. The national strategy of the US, on the other hand, is to maintain international hegemony by leveraging its knowledge, technology and patents, backed by its military prowess.
In 2022, the total sales of Taiwan's 800 listed companies will exceed US$1 trillion for the first time ever, with the semiconductor sector remaining the mainstay. Despite a possible downturn in the coming two years, Taiwan will still be able to hold onto to its irreplaceable role thanks to its powerful semiconductor and ICT supply chains. However, it is easy to sing the praises, but we need to look beyond the obvious to really understand Taiwan's strengths and weaknesses. My recent trip to Silicon Valley let me see the positives of Taiwan and yet also shed light on some concerns or issues that need to be explored further.
Many people are worried that deflation is lying ahead in the next two years. But there are many unknowns, and no one knows everything. Artificial intelligence (AI) is evolving faster than Moore's Law, and it is believed that by 2045, AI's computing power will surpass that of the human brain, and the world will then become a "world of singularity."
The US-China tensions have sent many wondering how they should run their businesses. On a few recent occasions when I delivered talks, I asked my audiences to vote on four possible scenarios that I suggested for the the US-China trade war and the future of Taiwan's technology industry. The voting results showed that two out of three people thought that the US and China would come to a stalemate and that regionalized and decentralized production ecosystems would affect the future industrial structure.
Not long ago, I was a guest speaker at an Alibaba startup forum sharing my entrepreneurial experience with Taiwan's young generation of entrepreneurs. I was curious about the purpose of Alibaba organizing startup businesses in Taiwan. And then, after reading "Hidden Champions: Ascent and Transformation," I got a better understanding. According to DIGITIMES' survey, 77% of Taiwan's startups that have the opportunity to go public want to raise capital abroad, with the US, China and Japan in the top three of their destinations.
MediaTek chairman Ming-Kai Tsai has noted that we often overestimate the short-term benefits and underestimate the long-term business opportunities. In 1998 when he started his business, the worldwide IT market had a size about US$500 billion. That's the time when the Internet was just taking off. In 2020, the IT industry expanded to US$3 trillion, but the Internet business opportunities reached US$13 trillion. At this point in time, the artificial intelligence (AI) and deep learning opportunities are just emerging. Can we imagine a huge business opportunity of over US$30 trillion by 2030, driven by the 3D Internet worldwide?