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Subscriber Exclusive: Why Taiwan Has a Lock on the World’s Chip Market

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Integrated circuits. Microchips. Semiconductors. Or, as they’re best known, chips. There are many different names for that tiny piece of silicon that powers and defines our modern lives. From smartphones to cars and washing machines, chips are the very foundation for most of the world as we know it. They are so critical to how modern societies function that they—and their entire supply chains—have become the basis for geopolitical competition. 

Unlike several other technologies, however, the highest-end chips can’t just be produced by anyone. Taiwan Semiconductor Manufacturing Co. (TSMC) controls about 90 percent of the market for advanced chips—and it doesn’t seem as if any other company or country can catch up. But why? What is TSMC’s secret sauce? What makes its semiconductors so special? And why is it so crucial to the world economy and geopolitics?

For answers, FP’s Ravi Agrawal spoke with Chris Miller, the author of Chip War: The Fight for the World’s Most Critical Technology. Miller is also an associate professor of international history at Tufts University’s Fletcher School.

What is it about chips or semiconductors that makes them so difficult to produce? Chris Miller, the author of Chip War, explains why only a couple of companies in the world can manufacture them.

Chris Miller breaks down TSMC’s special sauce when it comes to having an advantage over other companies and countries.

Watch Chris Miller explain why despite pouring tens of billions of dollars into its chip industry, China remains behind when it comes to making its own semiconductors.

Has the Biden administration’s CHIPS and Science Act been successful in ensuring that China will not have a leg up in semiconductor manufacturing?

Chris Miller

Author, Chip War: The Fight for the World’s Most Critical Technology

Chris Miller is an associate professor of international history at Tufts University’s Fletcher School and a Jeane Kirkpatrick visiting fellow at the American Enterprise Institute. He is the author of Chip War: The Fight for the World’s Most Critical Technology.

Host

Ravi Agrawal

Editor in chief, Foreign Policy

Ravi Agrawal is the editor in chief of Foreign Policy, the host of FP Live, and a regular world affairs analyst on TV and radio. Before joining FP in 2018, Agrawal worked at CNN for more than a decade in full-time roles spanning three continents, including as the network’s New Delhi bureau chief and correspondent. He is the author of India Connected: How the Smartphone Is Transforming the World’s Largest Democracy. 

Related

A Taiwan Semiconductor Manufacturing Co. factory in Nanjing.

Why Taiwan Has a Lock on the World’s Chip Market

Chris Miller explains why it’s so difficult to make high-end semiconductors—and how a war over Taiwan could induce a global crisis.

Q&A | Ravi Agrawal

Biden Needs to Broaden Semiconductor Sanctions on China

Enlisting U.S. allies to restrict Beijing’s access to mature-node chips would stymie Chinese efforts to dominate the sector.

Argument | Ben Noon

Who Will Make the Chips?

The U.S. is betting billions on its semiconductor push, but it needs more people for the factory floors.

Deep Dive | Rishi Iyengar

The Battle Over Semiconductors Is Endangering Taiwan

TSMC is an economic boon, but its success makes China covet the industry while its natural resource consumption reduces resilience.

Analysis | Frederik Kelter

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