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[News] Without Taiwan’s Semiconductor Manufacturing, U.S.’ AI Capabilities May Eventually Be Caught up by China
As the U.S. presidential election approaches, uncertainties also arise. Compared with the stance in President Biden’s term, U.S. presidential candidate Trump shows a remarkably different attitude regarding the “Taiwan issue,” while he highlights the “America First” agenda further.
However, according to a report by Technews, Trump may overlook the fact that Taiwan’s semiconductor is closely tied to shaping the “America First” stance that he values. By standing as a crucial ally in semiconductor, Taiwan could help the U.S. secure a foothold in the arms, AI, and technology race. Without Taiwan’s support, it is hard to say whether U.S. may face the risk of being overtaken by China, as the latter is developing semiconductor at full throttle. Read below for more analysis from Technews:
Intel’s “Five Nodes in Four Years” Roadmap: Details of Intel 20A Still Vague
Let’s look at Intel’s progress first. The tech giant has announced a plan to advance through five nodes in four years (5N4Y), as the latest update includes Intel 14A in its top-tier node strategy.
However, in the chart below, Intel 7, which has been categorized as a mature process, is already being caught up by SMIC’s 7nm and 5nm processes. This is happening despite the U.S.-China trade war, with the U.S. placing SMIC on the entity list and imposing equipment restrictions.
From the perspective of advanced nodes, Intel’s latest Lunar Lake platform will be manufactured with TSMC’s 3nm process this year. In addition, its next-generation Nova Lake processors will also adopt TSMC’s 2nm process, with a potential release date in 2026.
Intel CEO Pat Gelsinger has stated that the first-generation Gate-All-Around (GAA) RibbonFET process, Intel 20A, is expected to launch this year, with Intel 18A anticipated to go into production in the first half of 2025.
However, it is worth noting that Intel 20A was originally reported to be used for Arrow Lake and Lunar Lake processors, but Gelsinger confirmed at COMPUTEX that the latter will use TSMC’s 3nm process, with no mention of Arrow Lake’s progress. The market expects that some Arrow Lake processor orders may be outsourced to TSMC, which also suggests that the progress of Intel 20A may not meet expectations.
On the other hand, SMIC, limited by equipment constraints, has progressed to 7nm but faces delays with 5nm, so it will advance gradually with N+1, N+2, and N+3 processes.
Without Taiwan’s Semiconductor Manufacturing, the AI Computing Power of the U.S. May Eventually Be Caught up by China
Industry experts believe that without Taiwan’s semiconductor manufacturing, it would be difficult for the industry to progress, especially for AI and HPC chips that require significant computing power and advanced processes.
Currently, AI chips primarily adopt TSMC’s 4nm and 3nm nodes and will continue to use the 2nm process in the future. Without TSMC’s technology, the U.S., if it solely relies on Intel for its foundry and capacity, may progress relatively slow in AI computing power, which may make the country eventually lose the AI race with China, falling behind in future commercial and military equipment advantages.
According to a report by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) in December last year, the global semiconductor IC design industry was valued at USD 248 billion in 2022, while integrated device manufacturers (IDM) were valued at USD 412 billion, totaling USD 660 billion. The U.S. accounted for 53% of this value, while Taiwan only accounted for 6%.
On the other hand, the global foundry services in 2022 was valued at USD 139 billion, while the packaging and testing industry was valued at USD 50 billion, totaling USD 190 billion. Taiwan accounted for 63%, while the U.S. only accounted for 8%.
Despite this, the overall semiconductor industry value in the U.S. remains at USD 365 billion, making it the largest beneficiary in the sector. That of Taiwan, on the other hand, is only USD 159 billion, less than one-third of the U.S. total.
Sanctioning Taiwan Would Be “Shooting Oneself in the Foot,” Making the U.S. Harder to Win the Tech War with China
Regarding government subsidies, China is launching the third phase of its Big Fund, with a registered capital of 344 billion RMB (about USD 47.5 billion), which is significantly higher than the previous two phases. This represents a nationwide effort to invest in semiconductors, with a focus on enhancing semiconductor equipment and the overall supply chain.
The U.S. CHIPS Act, on the other hand, has a scale of USD 52.7 billion, which is comparable to China’s subsidies. However, as technology and arms races are long-term competitions, how related policies may evolve would also be subject to the results of the election.
On the other hand, China is currently working hard to better its semiconductor eco-industrial chain, expand its market share in mature processes, and continue advancing to more advanced process technologies, which may further shorten its gap with the U.S.
As the U.S. IC design sector is closely related to Taiwan’s semiconductor manufacturing technology, Taiwan’s role in the game has become a key factor for the U.S. to maintain its leading edge with China. Without Taiwan’s technological support, the techonological dominance of the U.S. might be threatened, as China’s semiconductor industry has gradually catching up.
