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Taiwan Dangles Incentives to Strengthen Global Chipmaking Lead

·2-min read

(Bloomberg) -- Taiwan will push investment from foreign chip gear suppliers while offering incentives to attract overseas talent, part of a campaign to shore up its lead in making the semiconductors vital to future technologies.

Most Read from Bloomberg

The government is considering ways to attract engineers and the suppliers of materials and equipment needed to make chips, Taiwan’s Minister of Economic Affairs Wang Mei-hua told reporters Tuesday. It will also encourage domestic companies to develop technologies in those areas, Wang said in Taipei.

Fleshing out the local supply chain will be vital in supporting the growth of companies like Taiwan Semiconductor Manufacturing Co., which makes the majority of the world’s most sophisticated chips for everything from phones to electric vehicles.

Taipei joins governments from Washington to Beijing in prioritizing a strong semiconductor supply chain at home, after a deficit of chips crippled the global production of cars and electronics -- even Apple Inc.’s iPhones. The crunch laid bare the vulnerability of economies to shortages of the tiny components, and the reliance of much of the world on Asian producers from TSMC to Samsung Electronics Co.

“We strive to grow Taiwan’s supply chain and have suppliers in close proximity to our chipmakers,” Wang said.

Read more: TSMC to Spend at Least $40 Billion to Address Chip Shortage

Taiwanese President Tsai Ing-wen told chip executives last Monday her government will support efforts by local businesses to develop expertise in semiconductor manufacturing equipment, so more can be made locally. It will also ask foreign chip equipment vendors to increase local production.

TSMC now makes more than half of the world’s most advanced chips. Yet it relies mostly on American and foreign firms including Applied Materials Inc., Tokyo Electron Ltd. and ASML Holding NV for advanced equipment.

During a shareholders’ meeting in 2020, TSMC Chairman Mark Liu said his company will continue to rely on foreign-designed equipment in the near future. TSMC has been able to attain technology leadership because it has forged close partnerships with American chip gear makers, he added.

China, Germany, Japan and the U.S. are among the nations racing to bolster domestic semiconductor manufacturing, wary of the fact that global chip production is centralized mostly in Taiwan and South Korea.

They’re offering incentives for chipmakers to build plants and develop cutting-edge technologies, and trying to foster and attract engineering talent. The White House last week unveiled plans to loosen immigration restrictions for those with desired science and engineering skills, while Taiwan has set up chip colleges to accelerate the buildup of a talent pool.

The World Is Short of Computer Chips. Here’s Why: QuickTake

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