Taiwan: World's Semiconductor Factory

Taiwan, a tiny island nation in the south china sea. It's one the richest countries in Asia with GDP per capita $25000. What is interesting is that they have achieved this growth by embracing technology. Country is a leading manufacturer of chips and electronic components specifically the semiconductors.
We are sure that you all have heard about Semiconductors. Semiconductors have become the most important part of our life nowadays. From consumer electronics such as mobile phones and computers, to the ATMs, automobiles, medical equipment. Semiconductors are used everywhere. The device you are watching this video on, has a semiconductor chip, and there are high chances, that chip is made in Taiwan.
These chips are new industrial trends and will define the future technologies. That's why many are saying the semiconductor is a the oil of the 21st century. Taiwan is the unmatched leader of the global semiconductor industry, with the Taiwan Semiconductor Manufacturing Company (TSMC) alone accounting for more than 50% of the global market, and this industry has made 15% of Taiwan's GDP. In 2020, Taiwan semiconductor production increased to more than 20% which is nearly $107 billion. This has made the world dependent on Taiwan more than any other nation. And recently the semiconductor shortage showed us how the world is so dependent on this tiny island nation. The shortage of semiconductor products resulted in price hikes of cars, mobile phones, and PC components. And this is why the delivery of your new car is late.
Now, Taiwan was not used to being rich, as it is today. As a nation, it has struggled a lot historically. In the beginning, Taiwan was mostly dependent on agriculture and it was under martial law and no real economic growth happened in the early period. It all started to change in the early 60s. After the reforms of the agriculture sector, Taiwan was slowly moving towards industrialization. Taiwan’s initial industrialization was started by the growth of textile factories and companies that produced light manufactures, such as small appliances, footwear, and athletic equipment. But at the same time, Japanese manufacturing companies were looking out for shifting their manufacturing out of Japan because of rising labor costs in japan. Taiwan grabbed this opportunity, and the economic policy of Taiwan changed to pursue export expansion. Companies subsequently moved to manufacture semiconductors and electronic equipment, including radios, television sets, and computers.
Taiwan got a head start of more than 1 decade before China opened its economy and became a favorite destination for global manufacturing. But Taiwan didn't stop just labor-intensive industries. Taiwan builds its own multi-billion dollar companies like TSMS, Mediatek, Asus, Acer, Winston, and many more. The reason behind Taiwan's growth is not only because the nation was in the right place at the right time to fill the gap of the slowing Japanese manufacturing sector. But it was mainly the people of the nation. You see, when Taiwan was formed after the civil war in China many intellectuals and highly educated people also came to Taiwan because of fear of communist rule in China. Yet with all this advancement and technical revolution, Taiwan still struggles with a lot of problems.
But Taiwan's problems are kind of different from what we usually discuss on this channel. As you know, Taiwan is heavily dependent on trade for its economic growth but the problem is how somebody can trade with nobody. You might be surprised to hear that most of the nations in the world do not recognize Taiwan as a country. Yeah, you heard it right, only a few countries in the world like Guatemala, Paraguay, and Vatican City accept Taiwan as a country. Plus as China claims the entire Taiwan as its own territory it became hard for Taiwan to trade on a global level. That's why they are so reliant on technical manufacturing that it is hard to replace some by other nations. Most nations including countries like the US, France, and the U.K do not recognize Taiwan as a country due to pressure from China as they don't want to lose access to a country with the second-largest economy with one of the biggest domestic markets. Also, even though China is one of the biggest trading partners of Taiwan, it is always under the threat of invasion by the Chinese military and recently we have seen the news of rising geopolitical tension between the two nations. So this atmosphere affects the foreign investors who invest in Taiwan.
So at the end we have to understand, these problems are not there from today. Yet even with all of these challenges, Taiwan has managed to achieve economic growth through its technical manufacturing skill. Taiwan can solve the world's hunger for chips.
#taiwaneconomy #taiwanmanufacturing

Видео Taiwan: World's Semiconductor Factory канала Global Economics