The new Cold War between the United States and China is increasingly focused on developing only one industry in one place: the computer chip industry in Taiwan.
In his report, published by the American newspaper “The New York Times”, author Rocher Sharma said that over the past year, Taiwan has occupied the lead in the race to make chips or semiconductors that are thinner, faster and stronger.
Its chips are the foundations of rapidly developing digital industries such as artificial intelligence and high-speed computing, while thinner chips will power the “Internet of Things”, whereby homes, cars, devices, and even clothes will be connected to smartphones and loudspeakers that are activated by voice over 5G networks.
Any country looking to dominate the digital future should purchase these super-fast and ultra-thin chips from Taiwan or South Korea.
Taiwan has the advantage in terms of technology and market power, and although it is a small island with a population of no more than 24 million, it is at the heart of the battle for global technological supremacy. And with the escalation of the Cold War between China and the United States, this importance will continue to increase.
Only two emerging economies after World War II managed to grow 5% faster for 5 consecutive decades and move from poverty to advanced economies, namely Taiwan and South Korea. And they continued to climb the industrial ladder by investing more intensively in research and development than in the rest of the emerging competing economies, making them among the research leaders in the advanced economic world.
Efficient governments played a major role in this success, as South Korea backed conglomerates such as Samsung and Hyundai, which exported consumer products under their own brands. Taiwan has recruited smaller companies that focus on making parts or assembling end products for foreign brands.
Taiwan was initially able to stay ahead of the curve by borrowing technology from Western countries. In the early 1970s, textiles were replaced by electronics as a leading manufacturing industry.
Through all the phases of the computer revolution, from computers to software to the mobile Internet, Taiwanese factories have been able to retool themselves quickly enough to remain an important global supplier.
In 1980, the Taiwan government established its first scientific complexes inspired by Silicon Valley, each of which included a private university focused on technology, and the government provided bonuses to Taiwan-born engineers to encourage them to return to their homeland to work there. By blending outside expertise with young local graduates, the science parks became an incubator for entrepreneurial startups.
By 2010, Taiwan’s Foxconn Technology was collecting 40% of the world’s consumer electronics products, using factories in Asia, Europe and Latin America.
Today, Taiwanese companies are major suppliers of a wide range of products, such as smartphone lenses, electronic paper displays, and computer chips.
One of the first engineers chosen by the Taiwanese government and tasked with developing the semiconductor industry was a Massachusetts Institute of Technology graduate, Morris Zhang. Zhang reviewed Taiwan’s strengths and weaknesses and rejected the idea of trying to compete with global brands such as Intel. Instead, he built the world’s first chip foundry, the Taiwan Semiconductor Industry Corporation.
Like Taiwanese contract manufacturers that previously made toys and textiles, this forge has remained out of the limelight, offering chips for global brands rather than its own hardware.
Foundries today occupy a fraction of the global chip market, which costs $ 430 billion, although all of the most advanced chips come from foundries, knowing that two-thirds of foundries’ production comes from Taiwan, and most of it comes from the Taiwan Semiconductor Industry Corporation.
The writer pointed out that Intel lagged behind the leaderboard this year due to production delays, opening the way to only two real competitors, Samsung and Taiwan Semiconductor Industry Corporation, both of which introduced 5nm chips this year and are planning to introduce the first 3nm chips in 2022. .
Many technical analysts expect that the Taiwanese business model offers a distinct advantage. Most customers prefer a pure forge that does not compete with them in designing chips or building devices, and only Taiwan provides this service.
Taiwan has tried to present itself as a neutral chip supplier, but it finds itself constantly caught up in the competition between China and the United States. For example, US sanctions have been put in place against Huawei, the leading smartphone maker in China, in part to prevent it from acquiring chips from Taiwan’s semiconductor maker.
In return, Beijing responded by speeding up a campaign to build its own advanced chip plants on Chinese soil, while the Trump administration called on the Taiwan Semiconductor Industry Corporation to build a US chip manufacturing plant in Arizona.
In the context of this competition, the dominant superpower cannot be identified. In fact, China is still more dependent on imports and foreign technology, but the United States is investing less in domestic production, and the Arizona plant is not large enough to fill the gap.
And unlike other Taiwanese factories spread around the world, chip mills are concentrated on the mother island, just 100 miles off the mainland coast of China.
From a historical point of view, the importance of Taiwan was determined according to geopolitical terms. Currently, as a byproduct of its successful economic model, Taiwan has become an important node in the global technology supply chain, adding economic weight to geopolitical criteria, and this burden is likely to increase as the battle for global technological supremacy intensifies.