Taiwan's Old Semiconductor Share at 49%... Likely to Be the Biggest Beneficiary of China's Sanctions

US to Investigate Status of Old Semiconductors in January Next Year
Targeting Chinese Semiconductors in Regulatory Blind Spots

Potential Benefits for Taiwan if China Sanctions Enforced
"Minimal Impact Expected as Korea Focuses on Advanced Semiconductors"

As the United States begins to assess the status of the legacy semiconductor market of 28 nanometers (nm; 1 nm is one billionth of a meter) and above targeting China, attention is also focused on the impact this may have on global manufacturers. Industry experts analyze that Taiwan, which has a higher proportion of legacy semiconductors compared to South Korea, which mainly focuses on advanced semiconductors, could become a beneficiary.

According to Bloomberg and other sources on the 21st (local time), the U.S. plans to conduct an investigation starting January next year on how domestic companies procure and use legacy semiconductors in sectors such as defense, automotive, aerospace, and telecommunications. This move is aimed directly at Chinese legacy semiconductors, which have been in a regulatory blind spot.

Market analysts expect that if the U.S. imposes tariffs or other sanctions on Chinese legacy semiconductors following the investigation, Taiwan, with its large production capacity, will relatively benefit.

According to market research firm TrendForce, Taiwan holds the largest share of global legacy process capacity this year at 49%, followed by China at 29%. The U.S. and South Korea account for only 6% and 4%, respectively. If the inflow of Chinese legacy semiconductors into the U.S. decreases, Taiwan’s position could strengthen further. Conversely, China is expected to face inevitable setbacks.

In its report, TrendForce projected that "China will focus on legacy semiconductor production and increase its share to 33% by 2027, chasing Taiwan," but if the U.S. market is blocked, China’s plans to expand production will inevitably face obstacles.

The impact on the domestic semiconductor industry, including Samsung Electronics and SK Hynix, is expected to be relatively minor. An industry official stated, "It is not yet clear what steps the U.S. will take following this investigation," but added, "Even if regulations on the use of Chinese legacy semiconductors proceed, domestic companies are focusing on high-performance advanced semiconductor businesses, so the relevance in terms of benefits or damages will not be significant."

On the 22nd, the Ministry of Trade, Industry and Energy issued a reference statement regarding the U.S. legacy semiconductor demand investigation, saying it is "aimed at reducing security risks posed by China to the U.S." The ministry added, "The government has been strengthening cooperation with major countries including the U.S. to stabilize the semiconductor supply chain, and based on this, it plans to continue consultations and cooperation with the U.S. government by comprehensively considering supply chain reinforcement and the impact on our companies."

This content was produced with the assistance of AI translation services.