The secret sauce for Taiwan’s chip superstardom

When 23-year-old Shih Chin-tay boarded a plane for the United States in the summer of 1969, he was flying to a different world.

He grew up in a fishing village surrounded by sugarcane fields. He had attended university in Taiwan’s capital Taipei, then a city of dusty streets and grey apartment buildings where people rarely owned cars.

Now he was off to Princeton University. The US had just a put a man on the Moon and the Boeing 747 in the skies. Its economy was larger than those of the Soviet Union, Japan, Germany and France combined.

“When I landed, I was shocked,” Dr Shih, now 77, says. “I thought to myself: Taiwan is so poor, I must do something to try and help make it better off.”

And he did. Dr Shih and a group of young, ambitious engineers transformed an island that exported sugar and t-shirts into an electronics powerhouse.

Today’s Taipei is rich and hip. High-speed trains zip passengers along the west coast of the island at 350km/h (218mph). Taipei 101 – briefly the tallest building in the world – towers over the city, an emblem of its prosperity.

Much of that is down to a tiny device no larger than a fingernail. The silicon semiconductor – wafer-thin and best-known now as a chip – sits at the heart of every technology we use, from iPhones to airplanes.

Taiwan now makes more than half the chips that power our lives. Its biggest manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), is the ninth-most valuable business in the world.

That makes Taiwan nearly irreplaceable – and vulnerable. China, fearing it could be cut off from the most advanced chips, is spending billions to steal Taiwan’s crown. Or it could take the island, as it has repeatedly threatened to do.

But Taiwan’s path to chip superstardom will not be easy to replicate – the island has a secret sauce, honed through decades of laborious work by its engineers. Plus, the manufacturing relies on a web of economic ties that the escalating US-China rivalry is now trying to undo.

When Dr Shih arrived at Princeton, “the US was just beginning the semiconductor revolution”, he says.