YouTube: 'Taiwan has too many semiconductors'
- Economics Explained posted “Taiwan Has Too Many Semiconductors” on April 28, arguing Taiwan’s chip dominance now looks like a concentration risk as much as a deterrent. - The pressure points are concrete: advanced packaging is a bottleneck, and ASE now expects more than $3.5 billion from that business in 2026. - TSMC and suppliers are expanding abroad as Taiwan keeps top nodes at home and tightens controls. (cnbc.com)
Taiwan’s semiconductor lead is still a strategic asset, but the new argument is that too much of the world’s chipmaking sits in one place. (youtube.com) (cnbc.com) That idea got a fresh push on April 28, when Economics Explained published “Taiwan Has Too Many Semiconductors” on YouTube. The video reframed the old “silicon shield” theory around operational choke points as well as geopolitics. (youtube.com) The basic issue is simple: modern artificial intelligence chips are not just etched on wafers, they also need advanced packaging that binds multiple pieces together. Reuters reported on April 22 that TSMC plans to open an advanced packaging plant in Arizona by 2029 because that step has become a bottleneck for customers including Nvidia. (money.usnews.com) That bottleneck is growing fast. TrendForce reported April 28 that TSMC’s CoWoS packaging revenue reached about 10% of company sales in 2025, and investors project capacity of about 1.3 million units in 2026. (trendforce.com) ASE Technology, the world’s largest chip packaging and testing company, said Wednesday that its leading-edge advanced packaging revenue should rise 10% to more than $3.5 billion in 2026. It also added $900 million for buildings and infrastructure and $600 million for machinery this year. (money.usnews.com) The concentration question is not only about factories. Taiwan’s chip sector is also pulling harder on labor, and a 2025 report cited by Taipei Times put the industry’s worker shortage at 34,000 people as expansion accelerated. (taipeitimes.com) Water and power are part of the same picture. In its water statement, TSMC said it is trying to reduce reliance on natural water by expanding reclaimed water use and other sources, while Taiwan’s Ministry of Economic Affairs projected higher electricity demand partly from semiconductor expansion and artificial intelligence. (esg.tsmc.com.tw) (moea.gov.tw) Export controls add another limit. Taiwan’s Ministry of Economic Affairs said in November it would add 18 items, including advanced semiconductor equipment, to its export control list and require licenses for exports. (taipeitimes.com) At the same time, Taiwan is not simply letting its lead move offshore. CNBC reported in January that Taipei still restricts TSMC’s overseas fabs to technologies at least two generations behind domestic production under the so-called N-2 rule. (cnbc.com) That leaves companies doing two things at once: keeping the most advanced logic in Taiwan while moving more packaging, testing and some fabrication closer to customers in the United States, Japan and Europe. The result is not an end to Taiwan’s central role, but a broader effort to make that role less singular. (cnbc.com) (money.usnews.com)
