Taiwan has just over 23 million people, but its semiconductor cluster designs and manufactures the advanced chips that power most of the world’s artificial intelligence. At the heart of this is one foundry - Taiwan Semiconductor Manufacturing Company - that builds cutting-edge processors no other company can replicate at scale.
The rise was built on “fabless-plus-foundry”: companies like NVIDIA and AMD design chips, then hand the manufacturing to a foundry that owns the factories, the clean rooms and the precision machines. This split let Taiwan specialize and scale, while designers could innovate without building billion-dollar plants.
Geopolitics has turned that specialization into a chokepoint. When global chip supply is concentrated in one place, a disruption - a natural disaster, a trade restriction, or a conflict - can ripple across industries from phones to data centers. The AI era, more than any before, depends on the latest chips.
For readers, the story is about how supply chains shape power. An island that contributes a small share of global GDP can nonetheless set the pace of an entire technology wave, simply because so many other players need what only it can make.