What are semiconductors?
Semiconductors are small integrated chips that are used in almost every device you can think of. From your car to your smartphone and smartwatch, they all use semiconductors. Semiconductors are small but useful parts, and the manufacturing of many devices can't reach the finishing line without installing these chips. The market size of the semiconductor industry was forecasted to be 460 billion US dollars in 2021.
Taiwan's dominance in the semiconductor business
Taiwan's ICT sector is among the best in the world. Many small and medium enterprises play a huge role in making Taiwan a powerhouse in technology. The ICT sector of Taiwan is popular for manufacturing semiconductor chips through a three-tier method of chip production. The method is so advanced that even companies in the United States like Intel haven't come up with the same standard of design and production of semiconductors. This means Taiwan will stay in the lead at least for the next few years while rivals try to play catch up. In the meantime, Taiwan is already moving to the next stage of semiconductor production with even smaller chips.
Fabless and Foundries
Traditionally, there are two different kinds of companies associated with semiconductor chips. Companies that design these chips are known as fabless. The second company where these chips will be manufactured is known as foundries. Taiwan has a huge number of foundries that result in a lot of revenue generation for the country. The major customer of all the foundries is fabless. According to Statista, Taiwanese foundries account for 66% of the global semiconductor market in 2017. Half of the annual US 4.4 billion of the Taiwanese semiconductor industry was coming from these foundries.
Investment in the ICT sector
Taiwan, for a long time, has been working under the radar and producing semiconductor chips. It recently emerged to the top of the surface with the global chip shortage that made superpowers like the United States realize the importance and dependency on Taiwan.
Taiwan has been alert and working tirelessly in the ICT sector for a very long time. An education system that produces 10,000 computer scientists and information systems management graduates made its priority to be on the top of the ICT industry. The focus on innovation, technology, and a relaxed working environment for companies has played a crucial role in putting Taiwan at the top of the semiconductor industry.
In comparison with other countries in Asia, Taiwan has been increasingly investing in education, innovation, and technology. All of this statement has started to pay-off with Taiwan leading the semiconductor market. According to the world economic forum's report in 2017-2018, Taiwan was among the top in innovation and macro-economic environment.
TSMC – Taiwan Semiconductor Manufacturing Company
Taiwan's semiconductor manufacturing company has made Taiwan the most attractive hub for the manufacturing and design of semiconductors. It was established in 1987 and currently is the only foundry that provides 5-nanometer production capabilities. Intel Corporation in the United States couldn't come up with that level of advancement and technology in the semiconductor market.
It can be hugely attributed to TSMC that has made Taiwan the world's leader in the manufacturing of semiconductors. These semiconductors have become more and more advanced and nuanced with the investment in research and development in Taiwan. Investments of billions of dollars in this industry have paid off Taiwan by making it the largest manufacturer of semiconductor chips in the world.
