Here's a comforting thought for anyone worried about the global supply of AI chips: the main factory isn't moving. According to Ofcom CEO Melanie Dawes, Taiwan will continue to serve as the central hub for global semiconductor production for many years to come. This comes even as the artificial intelligence revolution drives massive industrial change and sparks a global scramble to build more manufacturing capacity.
Speaking at a summit in New Delhi, Dawes said Taiwan is expected to remain a leader in chip production for the foreseeable future. It's not hard to see why. The island already produces more than 60% of the world's chips and over 90% of the most advanced semiconductors. That's not just a market share; it's a chokehold on the technology that powers everything from smartphones to the data centers training the next generation of AI.
At the center of this dominance sits Taiwan Semiconductor Manufacturing Company Ltd. (TSM), the world's most important chip foundry. It's the key supplier to AI heavyweights like Nvidia Corp (NVDA) and Advanced Micro Devices, Inc. (AMD), as well as consumer tech giant Apple Inc (AAPL). TSMC doesn't just command a huge share of the market; it contributes massively to Taiwan's economy and is often described as a strategic "silicon shield" for national security. At the same summit, Palo Alto Networks Inc (PANW) CEO Nikesh Arora highlighted Taiwan's unmatched efficiency and scale, noting the industry's multibillion-dollar scope.
And right now, Taiwan is cashing in on the AI boom in a big way. Exports climbed about 70% in January, marking the fastest pace in 16 years, driven almost entirely by insatiable demand for AI hardware. TSMC itself reported a 37% jump in January revenue as its biggest customers ramped up spending. This isn't just a good month; it's reshaping the island's economic forecast. The Taiwanese government has sharply upgraded its outlook, now expecting GDP growth of 7.71% this year and raising its full-year growth estimate to 8.68%—which would be the fastest pace in 15 years. Officials are also forecasting exports to rise 22.22% in 2026 while keeping inflation below 2%.
The commitment from the tech world is tangible, too. Nvidia is advancing plans for a major new headquarters in Taipei under a long-term lease, with an investment expected to exceed 40 billion New Taiwan dollars and create more than 10,000 jobs. It's a clear vote of confidence in Taiwan's enduring role.
Of course, the rest of the world isn't just watching. Dawes also expressed confidence in India's AI potential, citing its vast market size. India is accelerating its own chipmaking ambitions under the India Semiconductor Mission, and global tech leaders including Nvidia, AMD, and OpenAI have already begun expanding their footprint in the country. The race to build capacity is on, but for now, Taiwan isn't just in the lead—it's lapping the field.
