Observers said replicating Taiwan’s ecosystem requires not only massive investment in infrastructure, but also years of coordination between businesses, local governments and global partners.

While other Asian countries like Malaysia And Vietnam are vying for a piece of the lucrative semiconductor pie, analysts say it will take time for them to catch up with Taiwan’s standards.

“Taiwan has made progress step by step over the past 40 years. Taiwan can handle everything from upstream chips to downstream assembly of electronic products. This is Taiwan’s unique strength,” Hwang said.

“It is almost impossible for emerging countries to achieve this… in the short term. My view is that this ecosystem will last at least 10 years, it will be a golden decade (for Taiwan).”

THE CHALLENGES TAIWAN FACES

However, observers have also warned that Taiwan’s dominance in the semiconductor sector is not without risks.

Taiwan is expected to become a very elderly society next year, with 20 percent of its population aged over 65.

The problem is further exacerbated by its total fertility rate – one of the lowest in the world.

Official data shows Taiwan could lose 35 percent of its population by 2070, dealing a major blow to its workforce.

“The declining birth rate is a serious problem. It’s not just workers who are in short supply, there is also a shortage of engineers,” Hwang said.

However, some Taiwanese companies are already making necessary preparations to deal with the labor shortage.

For example, Quanta, the world’s largest producer of laptop computers, has reduced its workforce to a third of its workforce compared to five years ago by replacing them with smart manufacturing technology.

Beyond domestic issues, fears of military conflict across the Taiwan Strait amid strained relations with China could also undermine investor confidence and derail Taiwan’s AI dreams.