How Taiwan built a chip city #business

The father of Taiwan's chip industry, Morris Chang, talked a great length with the father of Silicon Valley, Frederick Turman. How do we do what you did there? You cluster, he said. Take your top two universities, like Silicon Valley's Berkeley and Stanford. Every piece of your industry wraps around them. So that's what Taiwan did. All located minutes from one another in this purpose-built science park, Qing Ha University, Chiaodong University, number one and number two in Taiwan, the companies that create the materials needed to make semiconductors, and then 20 chip factories called fabs ranging from the absolute bleeding edge of the technology to mature war forces. If you count every chip in the world from your toaster to your car, roughly one in five was born here. Add in the chips from all the fabs in Taiwan, it's three of five. But if you count only the most advanced chips, the market share of Xingqiu Science Park is essentially 100%. It was a very intentional design, definitely not organic. The people that the government forced to move off their land in this area and the surrounding area were not thrilled. 150,000 people in an area dramatically smaller than Silicon Valley work across 530 different companies, equipment and materials, fabrication, testing and quality control, R&D. This campus even has its own power and water system, data network and rail yard. They then married the campus to the just-in-time system pioneered by their geographic cousins and lunch rulers from the north. Chips made only when purchased, inventory never builds up. Every chip shuttles around these massive factories in a little box going through 1500 steps. One flick of a switch, every box stops moving. There's a problem, let's solve it. Materials don't pile up. Much of what is needed for that day's work, especially gases and chemicals, often arrives the same day. Not just in a box or a tank or container, but through a whole specialized pipe system that lets each factory buy the amount of nitrogen, helium, chlorine, whatever they need right now. All of this, coupled with that extreme focus on controlling the environment, is what gives them more than eight working chips for every batch of ten. One or two more working chips might not seem like a massive advantage, but over hundreds of millions of chips per year, it is decisive.