The changing position of the Taiwanese semiconductor industry

Szávó Lóránd Levente (2025) The changing position of the Taiwanese semiconductor industry. In: Szemelvények a BGE kutatásaiból 2024. Budapesti Gazdaságtudományi Egyetem, Budapest, pp. 186-193. ISBN 978-615-6886-21-7

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Abstract

This recearch investigates the shifting competitive dynamics between the Taiwanese and Chinese semiconductor industries, focusing on the market positions of TSMC (Taiwan Semiconductor Manufacturing Company) and SMIC (Semiconductor Manufacturing International Corporation). The study examines whether China's aggressive governmentbacked catch-up initiatives can close the gap with Taiwan's leading semiconductor firm, TSMC, and whether TSMC's market dominance has been affected by these efforts. The methodology involves a comparative case study approach, using a mix of secondary data, including financial reports, industry analyses, and news articles, to assess the strategic positions of both companies. Ultimately, the paper aims to provide a holistic understanding of the factors that sustain competitive advantage in the semiconductor industry, offering insights into the complex interplay of innovation, government policy, and global market forces. As a result of this research we can underline the TSMC's strong financial conditions, technology and international supply chains enable the company to maintain its leading competitive position in the semiconductor industry. It is worth mentioning that such a competitive position was achieved despite the fact that China made very significant steps forward in the competition for semiconductor development. The main obstacles in the way of SMIC include:technological barriers, sanctions, and inability to capture high demand in global markets. These findings only underline the fact that government-backed initiatives increase the potential of the industry, but are far from bridging the competitive gap with an entrenched leader like TSMC.