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Comparative Advantage - Taiwan - a Microchip Superpower
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26th October 2022
BBC Newsnight launched their Newsnight Global programme last night and the special on Taiwan was superb. Within it was a segment from Economics Correspondent Ben Chu on Taiwan's status as - far and away - the leading manufacturer and exporter of microchip production. It has dozens of high-scale "foundries" making a huge contribution to their economy.
This is a superb applied example to use of the out-sourcing of production but also the complex interplay of global economics and geo-Politics. Please do have a look at this short report from Ben Chu.
🚨 #Newsnight Global 🚨
— BBC Newsnight (@BBCNewsnight) October 26, 2022
Our Economics Editor @BenChu_ explains why Taiwan's status as a microchip superpower is decades ahead of any competitor
This is one of the reasons the island nation has a 'silicon shield' from attack https://t.co/6HYFBDfFjd pic.twitter.com/XmYgLkuVDl
Here is the pattern of trade (for goods) for Taiwan - drawing on 2020 data and produced by OEC.org. The trade data shows the scale of Taiwan's revealed comparative advantage in producing micro chips. In 2020, Chinese Taipei exported a total of $374B, making it the number 10 exporter in the world. Integrated circuits accounted for 37% of their exports of goods in 2020.
![](https://tutor2u-net.imgix.net/library/Economics/taiwan1.jpg?auto=compress%2Cformat&fit=clip&q=80&w=800)
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