How Taiwan Saved—and Transformed—the U.S. Semiconductor Industry
- TriOrient Research
- 3月26日
- 讀畢需時 4 分鐘
Taiwan didn’t steal the U.S. semiconductor industry, despite what some might claim. Instead, it created trillions of dollars in value, helping turn the U.S. into the global juggernaut it is today. Taiwan not only rescued the U.S. chip industry from Japan’s dominance decades ago but also kept manufacturing alive when it fell out of fashion stateside. Here’s how it happened—and why it matters.
The $4 Trillion+ Partnership
The U.S. dominates chip design, home to over 1,000 firms—including giants that owe their existence to Taiwan. Take a look at the top five U.S. chip designers by market value:
These companies, worth over $4 trillion combined, rely on Taiwan Semiconductor Manufacturing Company (TSMC) to turn their designs into reality. Without TSMC, they might not exist—at least not at this scale.
Add to that the fact the most cutting-edge development is done by chip startups, like AI chip designers TensTorrent, SambaNova, and Cerebras Systems, and the AI chip arms of Amazon, Google, Meta, Microsoft, and Tesla. None of them manufacture their own chips. They outsource to TSMC or Samsung, keeping the U.S. ahead in AI.
The Vision That Changed Everything
This revolution traces back to TSMC founder Morris Chang, a 25-year veteran of Texas Instruments who moved to Taiwan in the 1980s with a bold idea: the chip foundry. He barely had an inkling of what he was about to unleash on the global semiconductor industry.
“I only hoped for it,” he said in a 2007 interview.
His concept was simple but transformative—offer manufacturing services to any company that needed it, no strings attached.
At the time, the mid-1980s, there were around 50 small chip design firms struggling to survive. Their chips were made by giants like Fujitsu, IBM, NEC, and Toshiba.
But production came at a price. They only got space on the line when it wasn’t used by the manufacturers’ own chips. And by contract, the design often had to be transferred, giving the big company the right to come out with a competing chip under its own label.
Innovation suffered.
Engineers with big ideas couldn’t start companies either—building a state-of-the-art fab cost billions, a barrier few could overcome. Today, such fabs are $25 billion.
TSMC broke that bottleneck. By building fabs and investing in manufacturing R&D, it freed designers to focus on what they do best. They also became partners in a win-win partnership, because the bigger they grew, the more chips they’d need TSMC to manufacture. The result? Many of those small firms became today’s giants—four of the top five listed above included.
The U.S. Today: A Semiconductor Leader
The U.S. now leads the world in semiconductors, capturing 50.2% of global chip revenue in 2023, according to the Semiconductor Industry Association. It’s number one in chip design, electronic design automation (EDA) software, and production equipment.
Intense CHIPS Act lobbying may have created a misperception about the U.S. due to its focus on manufacturing – which the U.S. absolutely needs to improve. The U.S. isn’t playing catch-up—it’s already the global semiconductor leader.
Japan’s Fall
TSMC’s impact on the U.S. semiconductor industry shines brightest against Japan’s decline. In the mid-1980s to early 1990s, Japan ruled semiconductors, excelling in memory chips and pushing U.S. firms out of that market. But after conquering memory, Japanese companies turned inward, competing mainly with each other in a race to the bottom.
Then they missed the personal computer boom.
By 2000, half of all semiconductors powered PCs and related gadgets—printers, scanners, digital cameras, gaming graphics cards. U.S. firms like Nvidia, Broadcom, and Intel jumped in, many partnering with TSMC. Japan didn’t. Worse, Japanese firms clung to in-house production, refusing to outsource to foundries like TSMC for fear of losing tech secrets. That choice forced them to spend billions annually to keep up with manufacturing advances—billions they couldn’t sustain. Taiwan, through TSMC, filled the gap, enriching the U.S. industry in the process.
Manufacturing’s U.S. Exit—and Taiwan’s Gain
Advanced chip manufacturing fading from the U.S. wasn’t inevitable, but it happened. Subsidies could have kept it alive, and losing that edge was partly self-inflicted. Yet Taiwan, alongside South Korea, stepped up. Their excellence in production became a lifeline for U.S. innovation, proving the power of allied ecosystems.
Beyond Politics
This story isn’t about elections or partisan wins—it’s about Taiwan’s role in a global industry. Both former President Trump and President Biden deserve credit for tackling the China threat. But the real hero here is an economic partnership that redefined semiconductors.
Taiwan didn’t just save the U.S. chip industry—it helped transform it into a multi-trillion-dollar powerhouse. That’s a legacy worth recognizing.
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Morris Chang 2007 Computer History Museum Oral History
Semiconductor Industry Association (SIA) 2024 Factbook:
Japan portion: From extensive research, most from books.
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