Taiwanese chipmakers are ahead of their international rivals and it will be tough for U.S. tech companies to reduce their reliance on Taiwan, said Sebastian Hou from CLSA.
Tech firms like Apple, Amazon, Google as well as Qualcomm, NVIDIA and AMD rely heavily on Taiwanese contract manufacturers to produce up to 90% of their chips, according to Hou, who is managing director and head of tech research at the brokerage firm.
“It’s going to be a challenging and long journey for them to diversify away, and thinking about how long it takes for the chip development and cooperation — it’s going to take a while,” he said Monday on “Street Signs Asia.”
Semiconductors are used in everything, from smartphones and computers to cars as well as home appliances.
While the United States dominates the global semiconductor market share by revenue, Asia is the manufacturing powerhouse, according to a recent report from Bank of America. Asian countries produce more than 70% of global semiconductors — Taiwan and South Korea, in particular, have established unrivaled positions in high-end chip manufacturing capacity, the report said.
The global semiconductor shortage and geopolitical tensions with China has heightened Washington’s scrutiny of the supply chain. It has triggered a drive to bring manufacturing back to American soil to regain leadership and earmarked billions of dollars for its efforts. The U.S. is also said to be looking at alliances with other countries.
