Taiwan: A Fast-Moving Tech Hub that Powers the Future of AI

We examine how, over the past decade, Taiwan has become a nation booming with technological opportunity as businesses race to invest in its AI chips

As it continues to prioritise research and development, manufacturing and innovation, the country of AI is contributing significantly to the advancement of the technology industry.

Taiwan companies such as Taiwan Semiconductor Manufacturing Company (TSMC) and HTC have gained global recognition for their contributions to the information technology (IT) sector. Now, companies like Nvidia and AMD are capitalising on this success by becoming some of the most valuable companies in the world, as businesses seek to get their hands on their AI semiconductors.

Now responsible for more than half of the AI chips in the world, Taiwan is extremely valuable. Its world-leading technology capabilities are often attributed to its efficient manufacturing processes, incredible engineering teams and the most up-to-date equipment.

As a result, Taiwan has positioned itself at the centre of an AI race war between two global superpowers - the United States (US) and the People’s Republic of China (China).

In the beginning: Recognising strengths in AI development

Taiwan’s technology industry started in the manufacturing business and has since become world-leading within this area. Much of the country’s AI startup businesses are incredibly active in research and development to continue pushing digital transformation, creating a strong foundation for innovation.

Companies like TSMC have historically driven the country’s technological progress, prompting significant government funding. With the world producing more than a trillion chips a year, TSMC is widely recognised as one of the global leaders in semiconductor manufacturing, with its chips accounting for more than 90% of the world’s leading-edge logic chips in particular.

In order to keep developing successfully, Taiwan launched its AI Action Plan in 2018, roadmapping 2018 until 2021. 

The major components of this initiative were:
  • Developing AI talent: More than 10,000 AI technicians and applications were produced each year
  • Promoting Taiwan’s lead role in AI: Government investment to expand the nation’s world-leading chip industry
  • Building Taiwan into an innovation hub
  • Liberalising laws and opening test grounds
  • Transforming industry with AI: It proposed that AI talent would be matched to industrial needs

As international interest grew, Taiwan established itself as an innovation leader. Big tech giants such as Microsoft and Google have since set up AI R&D bases on the island to continue cementing connections with the local AI industry, in addition to creating an industrial ecosystem.

Taiwan recognised the important need to develop AI solutions and therefore accelerate industrial progress.

Nvidia and AMD: The battle for AI chip supremacy

Taiwan remains at the forefront of AI development and continues to be a pivotal driving force in global innovation. In the midst of its continued success, the country has needed to be more innovative so that it doesn’t suffer under US chip restrictions

Notably, China is currently confronted with US restrictions that make it harder for the country to access US AI chips and chipmaking tools. The Biden Administration stated this was over national security concerns.

As a result, Nvidia and AMD CEOs, Taiwan-born Jensen Huang and Lisa Su, have become more competitive. Over the past year, shares for both companies have soared as businesses remain eager to gain more AI-building chips.

Both CEOs revealed recently at 2024 Computex Taipei they would be announcing new AI chips for 2025 and 2026, as AI and data centres remain key areas of focus for both companies moving forward. 

Nvidia also recently took over Apple as the second-most valuable company, having surpassed a US$2tn valuation.

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