South Korea's AI Chip Supply Chain Takes Shape, Impacting Taiwan's Testing and Packaging Long-term Competition

Analysts from Silicon Valley have noted that South Korea's aggressive move to secure a foothold in the AI supply chain will have limited direct impact on Taiwan, but will likely intensify indirect competition, particularly in the medium to long term for Taiwan's packaging and testing industry.

The semiconductor supply chain encompasses design, manufacturing, packaging, and testing. Taiwan has long been a leader in advanced manufacturing and packaging and testing, but with South Korea and other competitors increasing their investments in AI-related capabilities, the global division of labor is undergoing a shift.

The AI trend has generated vast business opportunities for the semiconductor industry, drawing countries to compete fiercely for a share. Taiwan must continue to improve and solidify its key position in the AI supply chain, based on its existing advantages, an issue that the industry and policymakers must address in the long term.