Jensen Huang links Taiwan's chip dominance to a 1950s Dutch alliance

Nvidia CEO Jensen Huang has pointed to a decades-old chain of industrial partnerships as a key reason Taiwan became central to the world’s semiconductor supply. In a recent conversation with Lex Fridman, Huang traced part of that story back to Taiwanese economic planner K. T. Li and a relationship with Dutch electronics company Philips ¹².

Taiwan now manufactures more than 90% of the world’s most advanced semiconductors, according to the report. That concentration gives the island an outsized role in global technology supply chains, particularly as demand for processors grows alongside the artificial-intelligence boom.

The history began in the 1950s, when Li pushed for foreign expertise and domestic electronics manufacturing rather than relying only on more established industries. Philips’ involvement helped bring industrial knowledge and production capabilities to Taiwan during the early stages of that transformation.

That relationship was not a straight line to today’s chip industry. Taiwan’s later rise involved decades of investment, engineering work, expanding markets and the creation of specialised companies. Taiwan Semiconductor Manufacturing Company became a crucial chip fabricator, while Dutch supplier ASML developed the lithography equipment used in advanced semiconductor production.

Huang’s account connects those companies to a broader industrial ecosystem, rather than claiming that one European partnership single-handedly created Taiwan’s dominance. The distinction matters: TSMC and ASML occupy different parts of the supply chain, and their modern positions are the result of separate corporate histories and technological advances.

The growth of personal computers added another stage to Taiwan’s development. IBM’s decision to publish specifications for its PC architecture helped create a market for compatible machines and components, giving Taiwanese manufacturers new opportunities. Companies including TSMC and United Microelectronics Corporation later expanded through their own strategies as demand for increasingly capable electronics grew.

Huang’s explanation is particularly relevant now because advanced chips are difficult to replace quickly. Governments and technology companies are looking for more resilient supply chains, but building Taiwan’s combination of manufacturing expertise, engineering talent and supplier relationships takes far longer than announcing a new factory.

Our opinion

The useful lesson here is less that one forgotten alliance secretly created a chip empire and more that industrial leadership compounds over time. Taiwan’s advantage came from patient policy, international collaboration and companies developing different pieces of the same ecosystem. That is a far less dramatic story than a single origin myth, but it better explains why rivals cannot simply copy the result by spending more money today.

It also shows why semiconductor coverage needs historical context. The factories matter, but so do the relationships, skills and markets that made those factories possible. Taiwan’s position is powerful precisely because it is built from many connected decisions rather than one easily replicated asset.