Why are we so dependent on Taiwan for microchips? Why couldn’t these be manufactured elsewhere, in addition to Taiwan?
In: 1601
One major factor is that the materials to manufacture them are available in abundance in the area, so that means less transportation cost for raw materials, cheaper materials, and less issues sourcing them. Next is cheaper labor, and finally once they have them manufactured they are on one of the largest major international shipping centers, so they can be transported easily to where needed.
Other places DO manufacture them, but it isnt something anyone can do. The infrastructure needed to manufacture them is specialized requiring special equipment and that costs, then training, then all the things it takes to get their first product out is a 4-7 year process. Taiwan’s government subsidies their chip manufacturer to keep them vital to the world market to deter invasion from a certain country that likes to rattle the saber far too often. TSMC’s largest plant was reported to cost over 20 billion to get from start to producing. Not many people can invest that much to compete, and those that do know the time it takes to get up isnt a fast process.
THEN you have to have complex trade agreements, patents, and processing deals to make that investment worthwhile, and those take a lot of time and money to get going too. Then after all that, the next gen chips start being produced to be old tech requiring new tooling and equipment each generation upgrade.
Latest Answers