South Korea is home to global tech juggernauts like Samsung and LG, while the U.S. houses NVIDIA, Intel, and AMD, all brands that are practically synonymous with the semiconductor industry. However, neither country holds the honor of being the world’s top producer of computer chips. That distinction goes to Taiwan.
Taiwan is responsible for over 60% of all global semiconductor revenue and more than 90% of the world’s high-end chip manufacturing. This dominance is largely due to the influence of a single company. The Taiwan Semiconductor Manufacturing Company (TSMC) single-handedly serves 534 enterprise-grade customers around the world with more than 12,000 products, most notably the logic wafers used as the foundational component of computer chips. TSMC only continues to grow at a breakneck pace; TSMC’s January 2026 revenue report showed an impressive 36.8% year-over-year increase in revenue.
TSMC operates 11 fabrication plants, or “fabs,” in Taiwan. Geopolitical circumstances have given TSMC cause to consider manufacturing opportunities abroad, leading to the establishment of fabs in Arizona, USA, and Nanjing, China. The latter is especially notable considering recent Chinese breakthroughs in microprocessors. As it stands, though, Taiwan remains the center of semiconductor manufacturing. Production is focused primarily in and around the city of Hsinchu, where TSMC is headquartered.
How Taiwan rose to semiconductor supremacy
Taiwan’s semiconductor industry began in 1976 with a licensing contract signed by America’s RCA Laboratories and Taiwan’s Industrial Technology Research Institute (ITRI). This collaboration culminated in a Taiwanese factory that was able to attain an integrated circuit technology production rate of 70%, markedly surpassing the 50% yield of the original RCA factory in America. In 1985, ITRI president Morris Chang founded TSMC as a spinoff of the original research institute. TSMC entered formal operation in 1987 and was able to hit the ground running thanks to Taiwan’s strong semiconductor foundation and the involvement of big-name customers like Intel.
As global demand for machine learning increases, AI data centers cause computer component prices to skyrocket. Companies naturally turn to the world’s largest contract chipmaker for a solution. This is undeniably true on an international scale, as North America accounted for 70% of TSMC’s net revenue in 2024. That same year, the need for high-performance computing components (including AI accelerators) accounted for 51% of TSMC’s overall revenue.
Innovations pioneered by ITRI and TSMC have put Taiwan in a powerful position that other nations cannot usurp. Even with Silicon Valley and powerhouses like Qualcomm, the U.S. sits behind South Korea, China, and, of course, Taiwan, as the #5 producer of computer chips. Even many NVIDIA GPUs are manufactured in Taiwan despite being based in California, which just goes to show the global influence exerted by TSMC and its peers.
