Chip shortage highlights fragile supply chain
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Over 80% of the world’s semiconductors originate in Taiwan or South Korea. In the wake of the pandemic this dependence has led to a global shortage, threatening productivity in key industries worldwide
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PRODUCTION
Revenue share of semiconductor foundries, Q1 2021
TMSC 
Taiwan 55.6%
Samsung Korea 16.4%
UMC Taiwan 6.6%
GlobalFoundries U.S. 6.6%
SMIC China 4.3%
Others 10.2%

China plans to invest over $100bn to build up domestic chip industry

APPLICATION
TMSC revenue breakdown, Q4 2020

Smartphones 51%
PCs, servers 31%
IoT 7% 
Data carriers 4%
Others 4%

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Carmakers reduced orders in anticipation of lower demand – now face losses as chip-making capacity is diverted to more valuable sectors

Global auto industry losses
(2021, estimates)

Rapid growth of EV market has boosted demand – each car contains over $800 of chips

North America $5.2bn
Japan / South Korea $7.3bn
South Asia  $9.3bn
European Union $13.4bn
China $25.5bn


Infotainment systems
Brakes 
Steering 
Battery management
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Sources: TSMC, ACEA, Bloomberg, Counterpoint Research
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Automotive 3% TMSC alone accounts for 70% of auto-industry microcontrollers