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Taiwan encroaches on the field of chip design

Capital is the leading center of semiconductor manufacturing worldbut Taiwan is recently starting to rise and get ahead in chip design, threatening US dominance in the field.

In charts Taiwan research firm TrendForce’s top 10 chip designers by 2021 revenue, nearly half belong to semiconductors Taiwan. Specifically, MediaTek is in 4th place, Novatek Microelectronics is 6th and Realtek Semiconductor is in 8th place. Himax Technologies is present in this list for the first time, ranking 10th.

Although American companies hold the remaining 6 positions, the above results have marked Taiwan’s significant presence in the chip design field so far. The trend has raised concerns that the world is increasingly dependent on a single market for key components for a wide range of products, from smartphones to cars to home appliances.

Taiwan encroached on the field of chip design - photo 1
Taiwanese semiconductor companies are starting to enter the field of chip design


Advanced design capabilities are a must for chip development High performance. The US has been known as a semiconductor superpower because of its superiority in chip design, with a list of major players including Qualcomm, Broadcom, Nvidia and Advanced Micro Devices (AMD). The fabless model was pioneered by the US semiconductor industry in the 1980s, as a way to address the design field’s high barriers to entry. Fabless is a non-manufacturing model, focusing only on designing and selling hardware devices, and outsourcing production to a specialized manufacturer.

American companies have kept the high-value chip design process in the US, shifting lower-value production to Asian markets, especially Japan, Korea and Taiwan. The growth of Qualcomm founded in 1985, and Nvidia founded in 1993 are testament to the success of this model. However, now Taiwanese companies are starting to enter the field of chip design, posing a threat to American chip designers who only see Taiwanese semiconductor manufacturers as subcontractors.

The reason Taiwan’s chip designers have moved so quickly is in part because of their proximity to Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, and United Microelectronics Corp (UMC) ranks second. father. With a continuous flow of orders from all over the world, TSMC and UMC have given preference to Taiwanese design firms with which they have close relationships.

This is especially evident in smartphone chips, an area of ​​activity that MediaTek has surpassed Qualcomm to lead the global market, in part because of its particularly close relationship with TSMC. In its financial statement on April 27, MediaTek said that net profit increased 30% for the year to 33.2 billion Taiwan dollars (about 1.13 billion dollars) in the first quarter of 2022. This is the company’s all-time high to date. MediaTek’s revenue grew 32% to a record RM142.7 billion, driven by surging demand for 5G smartphone chips.

It is known that Qualcomm also sought help from TSMC amid a chip shortage, but the US semiconductor company’s weaker relationship with the Taiwanese semiconductor maker pushed Qualcomm down the priority list, causing the company to lose money. company lost market share.

Taiwan’s growing role in chip design also extends to US-based companies. Nvidia, AMD and Xilinx are running with Taiwan-born executives. TSMC is also a major supplier to all three companies.

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