Name: How Taiwan Became a Tech Powerhouse
Uploaded: 2023-08-26T13:02:15.000Z
Duration: 22 min 25 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

If we open a map, like the one you are seeing on the screen, and we zoom in on Taiwan, what

Adverbs of manner

we will see is a small island off the coast of China. An island, which does not particularly

At first glance, its territory is quite small; its population, with about 20 million inhabitants,

does not exactly make it a giant, also its geographical location does not seem particularly

At the end of the day, Taiwan does not stand out any more than other Asian islands such

as those that make up the Philippines or Indonesia.

However, in spite of everything, the truth is that today, Taiwan is one of the most crucial,

strategic and potentially dangerous territories in the world.

We are talking about an island that, according to many, could trigger a new global war.

(China and the US: On collision course for war over Taiwan. – DW)

(Pelosi's [Former speaker of the United States House of Representatives] Taiwan visit risks

creating greater instability between the US and China. – CNN)

But why on earth is the island of Formosa so important to major powers like China or

the US? What is it about this small territory that the mention of a world war even comes

Semiconductors are the electronic components needed to manufacture computers, airplanes,

household appliances, cars and, in short, any technology we can imagine.

While in the 20th century hundreds of battles were fought to control the supply of oil,

today those battles, or at least the political battles, are fought to control the semiconductor

It turns out that Taiwan is the most advanced place in the world in the manufacture of these

Do companies like AMD or Nvidia ring a bell?

These are companies dedicated to the sale of processors and graphics cards. Without

a doubt, they are true titans in their sectors, and yes, they are US companies.

But... how would you feel if I told you that AMD and Nvidia products are not manufactured

by them, but by a Taiwanese company called TSMC?

What's more: You've all heard of Apple, right?

Recently, Apple has released cell phones and computers with the most powerful, fastest

and most efficient processors on the market.

And once again, like AMD or Nvidia, Apple does not manufacture its own processors, but

rather they are manufactured by Taiwanese company TSMC.

Well, let's go then to the most famous chip producer in the world: the American giant

We have all used a computer or cell phone with an Intel processor at some point. In

fact, before the Taiwanese TSMC manufactured Apple's processors, Intel was the one who

Well, the thing is that in this case, Intel does manufacture its own processors, but it

does not manufacture all of them. It turns out that the graphics processors of the American

Intel are also manufactured by TSMC in Taiwan.

If China decided to invade Taiwan tomorrow, and expropriate companies like TSMC, China

could essentially cut off much of the world's supply of advanced semiconductors overnight.

In other words, by invading Taiwan, China could put virtually the entire global technology

industry on the ropes, thus gaining enormous political power. In fact, it wouldn't even

have to invade the island. It would be enough to block its trade with the rest of the world.

In any case, the most serious problem of all is that a cut in Taiwan's supply would not

only affect the computers and iPhones of its citizens, but would also have a terrible impact

on the military and war capabilities of the West.

A lot of military weaponry, from ships, tanks and fighter jets to missiles and drones, require

advanced semiconductors that are only produced on this island, in Taiwan. And that's something

(Pentagon ups pressure on Taiwan's TSMC to produce chips in the U.S. U.S. fears interference

from company's Chinese customers. – Taiwan News)

In short, Taiwan is not only the undisputed leader in the semiconductor sector, but also

the entire West is terribly dependent on it.

Now, given all this, there is something very surprising that we should pay attention to:

How did a remote Asian island become the world's most advanced semiconductor powerhouse?

How on earth is it possible that not even the USA or Japan, the cradles of world technology,

have been able to match Taiwan in the production of these components?

What recipe for success has the island of Formosa followed to be so many steps ahead

Well today, on VisualEconomik, we tell you what's behind it all. So... Let's get started!

Let's see. Although today Taiwan is indispensable in the most technologically advanced sectors

of the modern economy, in reality, this was not always the case.

In fact, until just a few decades ago, Taiwan was a really poor island, a place that had

been ravaged by numerous wars, and had to be helped economically by Western countries

At that time, and somewhat like mainland China, Taiwan was a territory with very little industry.

Its main activity was agriculture, a sector that did not allow it to advance economically.

So if Taiwan wanted to leave poverty behind, it had to change its productive model and

And as we say around here, no sooner said than done.

Starting in the 1960s, and thanks to international aid, Taiwan began to develop its industry

In the beginning, Taiwanese factories were engaged in making products that were highly

dependent on cheap labor such as the production of clothing, toys or accessories.

But over time, the Taiwanese government wanted to go a little further, it wanted to promote

a more advanced industry, and for this purpose it supported the arrival of companies such

as the well-known Philips for instance. We are talking about companies that, in many

cases, were dedicated precisely to the production of semiconductors.

Of course, the first semiconductor factories in Taiwan were quite rudimentary. Basically,

they were assembly factories: they did not do any design or fabrication, but simply assembled

[A bit like being someone who has Lego pieces and builds a figure with them. That's it.]

The point is that this was the seed of the semiconductor industry in the country. However,

as you can imagine, something had to happen for those small assembly factories to become

the huge technology behemoths they are today.

Something must have switched for that impoverished little island to emerge as the kingdom of

The question is, what was that something?

(SEMICONDUCTORS AND TAIWAN: AN IMPOSSIBLE STORY)

By the 1970s, which is when Taiwan began to have those first assembly factories, the island's