Taiwan's legacy chip industry contemplates future as China eats into share​

When Taiwan's Powerchip Technology entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access the promising Chinese market. Nine years later, however, that Chinese foundry, Nexchip, has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing's localisation call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. These Chinese foundries, which include Hua Hong and SMIC, are threatening the long-held dominance of Powerchip, UMC and Vanguard International in the market for chips used in cars and display panels by slashing prices and embarking on aggressive capacity expansion plans.