In Hsinchu Science Park, the lights do not go off. Twenty-four hours a day, seven days a week, in cleanrooms where workers wear full-body protective suits and the air is filtered to remove particles a hundred times smaller than a human hair, Taiwan Semiconductor Manufacturing Company's fabs produce the chips that run the world's most powerful AI systems. The orders have never been larger. The waiting lists have never been longer. And the economic impact on Taiwan has never been more profound — or more uneven.
TSMC's financial results tell one story. In 2025, the company reported revenues of $108 billion, a 38% increase over the previous year, driven almost entirely by demand for its most advanced chips — the 3-nanometre and 2-nanometre processes that only TSMC can produce at commercial scale. Nvidia, Apple, AMD, and a growing roster of AI-focused clients are willing to pay extraordinary premiums for the privilege. TSMC's profit margins, in an industry where 20% is considered healthy, are running above 45%.
For Taiwan, this is a windfall. TSMC pays some of the highest corporate taxes in Asia. Its 57,000 engineers earn salaries that have created a new upper-middle class centred on Hsinchu, a mid-sized city two hours south of Taipei that is now Taiwan's most economically dynamic urban area. Property prices in Hsinchu have risen 60% in three years. The broader supply chain — materials, equipment, design tools, speciality chemicals — employs another 300,000 people across Taiwan.
But the transformation is not without tensions. The concentration of economic benefit in the TSMC orbit has deepened regional inequality. Young Taiwanese who did not study engineering find themselves priced out of housing in Hsinchu and increasingly in Taipei. Water and electricity consumption at TSMC's fabs have made Taiwan's resource constraints a subject of genuine public debate.
The geopolitical dimension is impossible to ignore. TSMC's dominance — what analysts call the "silicon shield" — gives Taiwan a form of strategic leverage that is simultaneously its greatest protection and its greatest vulnerability. The United States, Europe, and Japan are each subsidising domestic semiconductor manufacturing. TSMC itself is building fabs in Arizona, Japan, and Germany. The dispersion of capability is likely to erode Taiwan's unique advantage in the long run.
For now, the orders keep coming. The 2-nanometre production ramp is sold out. The first 1.4-nanometre process nodes are in development. And in the cleanrooms of Hsinchu, the lights stay on through the night.
