National Choices and Resource Allocation: Taiwan Cannot Do Everything and Win Everywhere

National Choices and Resource Allocation Semiconductors are currently Taiwan’s highest priority, putting it at the forefront of global attention. This has also drawn President Trump’s envy: he has repeatedly singled out TSMC and Taiwan, accusing them of stealing America’s chip industry. But Taiwan’s position results from choices, positioning, trade-offs, focus, and business models. Taiwan is neither a country of over a billion people nor the world’s dominant power. With just 23 million people, it must recognize that it cannot do everything and win everywhere. Consider the Olympics. China has 1.4 billion people but knows its strengths lie in diving and table tennis rather than track and field. South Korea, the closest comparison with Taiwan, knows its strengths in shooting and archery. Focus training and resources on events where you have confidence. Capital is a secondary constraint on Taiwan’s development; talent is more important. Fewer than 130,000 children are born annually. Even if all of them entered semiconductor-related industries after college twenty years later, they might still not be enough.