Taiwan's Semiconductor Industry: The Backbone of Global AI

Taiwan drives global AI innovation, making it essential for the future of technology.

### Taiwan: The Crucial Hub of Global AI and Semiconductor Manufacturing
* 🇹🇼 "**90% of all the world's most advanced semiconductors or chips** are made right here in Taiwan," making it the **epicenter of artificial intelligence technology**.
* 💻 Taiwanese companies are responsible for manufacturing **90% of AI servers**, highlighting their **dominance in the AI ecosystem**.
* ⚠ However, this leadership is threatened by China's increasing assertiveness, as the **future of AI is closely linked to Taiwan's security**.
* 🏭 In the 1980s, Taiwan invested heavily in chip manufacturing technology, transforming its image from producing **cheap toys** to becoming a **high-tech powerhouse** with a prestigious pool of **STEM talent**.
* 🔗 The partnership between Taiwan Semiconductor Manufacturing Company (TSMC) and Nvidia has been pivotal, as TSMC has **manufactured Nvidia's chips since the beginning**, fueling growth for both companies.
* 💧 As AI servers evolve, companies like Asia Vital Components (ABC) are shifting from traditional cooling methods to **liquid cooling solutions**, which could rise to **30% of thermal spending** by 2028.
* 🌍 Since 2023, Taiwan's AI-related exports have **surpassed China's**, emphasizing its **growing significance** amidst the US-China tech war and the necessity for **diversified manufacturing operations abroad**.
* 📉 A potential conflict could severely disrupt the semiconductor supply chain, with estimates suggesting a **$10 trillion impact on global GDP**, underscoring the **importance of Taiwan in maintaining global technological stability**.

Why Taiwan’s Security Matters for the Future of AI

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Taiwan's Crucial Role in AI and Semiconductor Manufacturing

Taiwan produces 90% of the world's advanced semiconductors and AI chips, making it the epicenter of the global AI ecosystem.

The island's tech industry has evolved from a reputation for cheap manufacturing to becoming a leader in high-tech chip production, with TSMC playing a pivotal role.

However, Taiwan's dominance in AI and semiconductor manufacturing is under threat from China's assertiveness, making the island's security crucial for the future of AI.

The Role of Taiwanese Companies in AI Server Hardware

Taiwanese companies have been crucial in supplying hardware components for AI servers, evolving from traditional PC power to meeting AI demands.

The AI server setup includes chips, motherboards, power modules, liquid cooling systems, and server racks, with Taiwan being the primary source for these components.

Asia Vital Components (ABC) has played a significant role in the AI supply chain, specializing in heat dissipation and pivoting to liquid cooling solutions, which are expected to increase in demand as AI servers grow.

Taiwan's Dominance in AI and Tech Manufacturing

Taiwan has become a key player in AI computing, attracting major tech companies like Google, Amazon, and Microsoft.

Since 2023, Taiwan's AI-related exports have surpassed China's, driven by the US-China tech war and chip export bans.

The concentration of AI technology in Taiwan raises concerns due to China's aggressive actions, leading Taiwanese companies to diversify their manufacturing operations abroad.

The Impact of the CHIPS Act on Semiconductor Manufacturing

The CHIPS Act is providing incentives to bring semiconductor manufacturing back to the U.

Clients are eager to reduce reliance on a single region, but building up manufacturing in other areas will take time.

In the short term, replicating Taiwan's semiconductor dominance is impossible, leaving global stability anchored to the island.