How Did Taiwan Become so Important for Semiconductor Supply?
The Hundred
July 26, 2022
In The Hundred newsletter, Shirley Lin explains in only 100 words the development of Taiwan's semiconductor industry, which showcases the island's innovative approach to economic resilience:
“In 1987, when semiconductor firms were still vertically integrated, Morris Chang founded TSMC on the premise that high costs of chip manufacturing hindered an explosion of innovative chip design firms. With substantial Taiwanese government support, TSMC assumed those capital costs, hoping that process innovation would render its contract manufacturing model profitable. The strategy paid off; the subsequent digital and mobile revolutions saw design firms—from Huawei to Apple—proliferate, outsourcing chips to independent foundries because they were not competitors. Taiwan has successfully nurtured a uniquely efficient and supportive chip ecosystem from IC design to testing and packaging, entrenching its indispensability.”