Reports that Taiwan’s semiconductor industry could be considering leaving the country amid rising geopolitical tensions, and in light of Taiwan Semiconductor Manufacturing Co’s (TSMC) plans to build factories in the US and Japan, were dismissed last week by Minister of Economic Affairs Wang Mei-hua (王美花). Wang said that Taiwan has an important chip manufacturing cluster, its capabilities are second to none and no other country could displace Taiwan’s dominance in semiconductors.
Wang also downplayed concerns that a number of TSMC engineers relocating to the US for the company’s new plant in Phoenix, Arizona, would lead to talent shortages or a loss of technology in Taiwan. She said that most advanced chips would still be made in Taiwan despite TSMC’s US and Japanese investments.
Similarly, TSMC chairman Mark Liu (劉德音) last week at a monthly trade group meeting also denied that Taiwan would experience a brain drain, particularly as the company would still have more than 50,000 engineers in Taiwan after dispatching only about 500 engineers to the Arizona plant, adding that the chipmaker’s global expansion is essential to the nation’s dominance in the industry.
While Taiwan has a well-developed semiconductor cluster, the industry still has an opportunity to grow into an indispensable global technology partner, Liu said. The upstream and downstream firms in the supply chain — from integrated circuit design, chip manufacturing, and chip packaging and testing, to semiconductor components and materials production — could enhance a comprehensive industry supply chain, Liu said.
Over the past 30 years, Taiwan’s semiconductor industry has focused on domestic research and development, which has created world-leading technologies. However, as the main force of this effort has gradually shifted from students, faculty and research staff returning from abroad in its early years, to those with domestic master’s degrees and doctorates, the nation is facing talent shortages, compounded by the younger generation’s lack of ambition and its insufficient skills in dealing with globalization.
People with master’s degrees and doctorates from Taiwan are not inferior to those who graduated from foreign universities, but the common perception is that they tend to pursue a comfortable life with stability rather than stepping out of their comfort zone to engage in new experiences. As Liu has said, the problem Taiwan’s semiconductor industry is facing is not a brain drain, but that younger generations avoid uncertainty by not venturing out to challenge their boundaries — such as by studying abroad.
Although the COVID-19 restrictions in China and intensified US-China tensions have resulted in more skilled Taiwanese semiconductor engineers returning from China, strengthening research exchanges with advanced countries such as the US, Europe and Japan through talent circulation is necessary to ensure that Taiwan’s advanced chipmaking technology can continue leading the world.
By encouraging the movement of skilled workers between Taiwan and other like-minded nations, Taiwanese talent can go overseas and move forward, while the nation can bring in expertise from abroad to continue industry innovation. This would make Taiwan indispensable to the global economy, and could help the nation break free from the handcuffs of geopolitical challenges.
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