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Taiwan's Semiconductor Success Story

Illustration shows TSMC (Taiwan Semiconductor Manufacturing Company) logo

Last week, former US President Donald Trump made controversial remarks accusing Taiwan of taking over the computer chip industry from the United States. However, industry experts clarify that Taiwan's success in semiconductor manufacturing was not due to theft but rather a result of strategic planning, hard work, and investment.

The foundation of Taiwan's semiconductor industry can be traced back to Morris Chang, the founder of Taiwan Semiconductor Manufacturing (TSMC) in 1987. Chang's innovative business model of a 'pure-play foundry,' focusing solely on manufacturing chips based on client designs, revolutionized the industry.

Today, TSMC dominates the global chip market, producing over 90% of advanced chips worldwide. The company's success lies in its ability to scale production efficiently, reinvesting revenue into technological advancements.

Taiwan's conducive environment for research, development, and investment, coupled with a skilled workforce and robust tech ecosystem, has further propelled its chip industry. Competitors like Intel and Samsung are striving to replicate TSMC's success.

Despite calls for Taiwan to relocate chip-related research to the US, the Taiwanese government remains committed to fostering innovation domestically. Trump's suggestion that Taiwan should pay for US defense has raised concerns within the island, likened to a 'protection fee.'

The ongoing tensions in the Taiwan Strait have prompted TSMC to expand globally, with plans for factories in the US. President Biden's CHIPS and Science Act aims to boost domestic chip production, reducing reliance on Taiwan and South Korea.

As the semiconductor industry evolves amidst geopolitical challenges, collaboration between chip firms is crucial for mutual benefit. TSMC's efforts to adapt its manufacturing systems to different cultures are essential for its global expansion.

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