This story is part of Forbes’ coverage of Taiwan’s Richest 2024. See the full list here.

Key semiconductor players such as TSMC and ASE see sales and shares jump on AI growth as they move to expand offshore to hedge risks.

Often called “Silicon Island,” Taiwan has long supplied most of the world’s semiconductors, creating wealth for the billionaire founders of its chipmakers. Now surging demand for the sophisticated microprocessors needed to power AI is adding to their riches, with the local semiconductor subindex up 43% from a year earlier, outperforming the broader market’s 31% gain.

Taiwan Semiconductor Manufacturing Co. (TSMC) is the world’s largest semiconductor foundry, with a 60% share of the global market in 2023, according to Hong Kong’s Counterpoint Research. It reported a 17% jump in revenue to NT$593 billion ($19 billion) in the first quarter, following a 5% dip in 2023. That lifted founder Morris Chang’s wealth by a hefty 44% to $3.3 billion since last year’s ranking of the 50 richest. TSMC counts Nvidia among its biggest customers, supplying the California-based company’s Grace Hopper superchips for advanced computing.

Known as the father of Taiwan’s chip design industry, Tsai Ming-kai, founder and chairman of MediaTek, saw his fortune grow nearly a third to $3.2 billion. His firm is racing to blueprint chips for both generative and edge AI, technology to power devices away from the cloud, such as smart home appliances. MediaTek’s revenue climbed 40% in the first quarter to NT$134 billion, following a 21% dip in annual revenue last year.

“The whole chip industry has done well on the back of AI.”

Chris Miller, author of Chip War

“Taiwan’s semiconductor entrepreneurs have done very well over the past couple of years, because the whole chip industry has done well on the back of AI,” says Chris Miller, author of Chip War and an associate professor at Massachusetts-based Tufts University. Global semiconductors sales are projected to increase 13% to $588 billion this year, despite an estimated 9% downturn in 2023 after an all-time high the year before, according to industry group World Semiconductor Trade Statistics.

Another boom beneficiary is Archie Hwang, founder and chairman of privately owned Hermes-Epitek, whose wealth rose to $1.65 billion from $1.55 billion. Set up in 1977, Hermes-Epitek specializes in optoelectronic equipment, used to make advanced microprocessors, and claims to have supplied almost all foundries in Taiwan and Southeast Asia.

TSMC has committed over $95 billion to building new factories abroad.

Meanwhile, Taiwan’s chipmakers are starting to expand offshore with new factories. A key driver is the desire for supply chain localization, says Brady Wang, associate director at Counterpoint Research and a former TSMC engineer. The industry and major governments “are aware that actually, the supply chain is vulnerable,” says Wang. “It could be interrupted by a single event, like Covid.” Other potential disruptions include cross-strait tensions and natural disasters such as the earthquake that occurred along the island’s east coast in April, the strongest in 25 years.

Since 2020, TSMC has committed over $95 billion to building new factories abroad. In February, it opened its first in Japan, and in April said it would construct a total of three in Arizona. Its first European plant, in Germany, is slated to open in 2027.

United Microelectronics Corp., another Taiwan contract chip maker, with 6% of the global market, according to Counterpoint Research, is building a $5 billion plant in Singapore, its second in the island state. In January it partnered with Intel to collaborate on the production of a 12-nanometer chip process platform at the tech giant’s manufacturing hub in Arizona.

Taiwan’s semiconductor assembly and testing company ASE Technology Holding, which has partnered with TSMC since 1997, is constructing two new plants at its existing facility in Malaysia, slated to be completed in 2025.

Jason and Richard Chang, brothers at the helm of the company, advanced to No. 6 with a combined $7.8 billion, up 24%. In March ASE said it would further develop its advanced interconnect technology, the wiring that links components on semiconductors, to meet the demand for AI chips. Its revenue shrank 13% in 2023 to NT$582 billion, but inched up 1% in the first quarter this year.

One potential challenge to expansion plans is labor shortages. The U.S. faces a shortfall of 67,000 qualified semiconductor industry engineers, technicians and other employees by 2030, according to the U.S. Semiconductor Industry Association. Japan and Germany also project shortages of skilled workers. These investments have a multi-decade time horizon, says Miller. “Friction over a couple of years, in this sort of startup phase, is something that isn’t necessarily determinative.” He adds, “The biggest factor is going to be customer demand.”

ON THE RISE

Taiwan’s semiconductor industry is seeing a rebound in sales, thanks to the growth of AI.