From Asterisk Magazine, Issue 13, March 2026:
TSMC (and most of Taiwan’s chip industry) spun out of one government research institute. How did ITRI implement one of the most successful industrial policy programs of all time?
In 1973, Taiwan was a humble middle-income country. Its GDP per capita, adjusted for purchasing power and inflation, was $8,000 — on par with Nicaragua or Bangladesh today. Its main exports were cheap consumer electronics and textiles, and “Made in Taiwan” branding was a symbol of low cost rather than technological sophistication. The country was trying to attract foreign investment in electronics manufacturing, but its industry was still concentrated in the low-value-added stage of the supply chain. But 1973 was the year that Taiwan set itself on a path to become something more. 1973 was the year that Taiwan established the Industrial Technology Research Institute.
ITRI is an applied R&D lab, founded to rapidly elevate Taiwan’s technological capabilities, particularly in electronics.1 In addition to conducting research, ITRI acquired technology from abroad, trained Taiwanese firms to use it, and even provided services to firms directly — with the ultimate goal of making Taiwan a global leader in the electronics industry.
It succeeded, to say the least.
ITRI started with a shoestring budget of NT$210 million ($16 million today) and 400 employees, of whom only 10 had PhDs.2 It became one of the highest-return research initiatives in history. ITRI was responsible for creating multiple billion-dollar companies — including the legendary TSMC— and driving Taiwan to produce 60% of the world’s chips today.
How did it do it?....
....MUCH MORE
