Taiwan’s semiconductor industry has recently become a heated topic of global debate, leading to an abundance of related books and academic research in both Chinese and English. Amid this worldwide attention, this book aims to offers a perspective rooted in Taiwan’s own history, combining several unique characteristics.

First, from a historical standpoint, this book covers the long, half-century journey of Taiwan’s semiconductor industry, tracking its development from ‘nothing’ to ‘something’.
Second, from an analytical perspective, focusing on the economic effects of changes in semiconductor technology, it examines how the Taiwanese industry seized opportunities presented by technological shifts to transition from ‘weakness’ to ‘strength’.
Third, from a spatial angle, it explores the relationship of competition and cooperation with major countries such as the United States, Japan, South Korea, and China, tracing Taiwan’s evolution from the ‘periphery’ to the ‘center’ of the global industrial map.
In short, the book interprets, through the lenses of technology and economics, the arduous journey of Taiwan’s semiconductor industry as it moved from ‘nothing to something’, ‘weakness to strength’, and ‘periphery to center’.

There are widespread misconceptions about the success of Taiwan’s semiconductor industry abroad. The most extreme claim, voiced by the U.S. President Donald Trump, is that Taiwan “stole our chip business,” while a more moderate view attributes Taiwan’s rise to government subsidies. However, although Taiwan did implement industrial policies, it did not provide financial subsidies. Instead, the government’s support involved introducing technology, and promoting investment and establishment of enterprises. In fact, the relationship between the government and industrial pioneers was similar to that of Western venture investment funds and startups. In 1973, Taiwan’s government established the Development Fund, simultaneously acting as both a venture capitalist and entrepreneur. This fund allowed the government to absorb the risks of early-stage technology investment and recruited professional managers to lead new semiconductor enterprises, willingly positioning itself as a limited partner throughout their development. In essence, national capital and professional managers joined hand in a bold industrial experiment. This approach provided strong incentives for professional managers to pursue success in the market and attracted outside funding, which helped to dilute the bureaucratic control. If the management was successful, the investors gained substantial rewards, and the government, though relinquishing direct control over the enterprises, would gain instead a continuously flourishing industry. This model represented a Taiwan-style adaptation of Silicon Valley’s innovation mechanism. The government’s greatest contribution was its successful replication of Silicon Valley’s function when there was no existing domestic venture capital ecosystem. In an environment characterized by insufficient domestic capital and a reluctance to take risks, the Taiwanese government effectively created Asia’s own version of Silicon Valley.

This book began the process of data collection, discussion, and writing in early 2022, and was completed over a period of three years. It offers an in-depth exploration and analysis of the hegemonic competition among the technology industries of Taiwan, Japan, and South Korea, the shifting alliances within the semiconductor industry, and the geopolitical contest that has shaped the competitive advantages and weaknesses of Taiwan’s semiconductor industry.