Made in Taiwan. Well, well! Looks like you're flourishing, Taiwan! Why did China waste all of this effort to call for me from Taiwan? You're saying Taiwan again? You call yourselves a country? You're nothing compared to us! You're a part of China. You're like a drop in the ocean. You're like planet earth in the galaxy. You're like a piercing in Miley Cyrus' nose! Okay, I get it, we're a young island... -but we're the light! -What light? You're like a chip in a family-size bag of chips! Listen fella! If I gather one Chinese neighborhood, we can invade
you guys. I understood all of these similarities, man. Now, what do you want? I want you to stop this industrial movement you're going at. If you want to manufacture something that bad, write "Made in China" on it, like everything that we manufactured or faked in the world. All right, I'm open to agree... but there's one thing that we won't be able to stop. The whole world depends on these chips. Even you can't do anything without it. What do you mean I can't live without some chips? I can start a keto diet tomorrow morning. The keto
got your brain. These microchips are part of the manufacturing of everything around you, your phone, your laptop, and even your wife's smart dishwasher. Without these chips, the dirty dishes will pile up, and your wife will be mad, and you and I know how bad it gets when she's mad. This is aside from... -the banking system! -The what? Like in commerce, transfers, and the pace of trading. I'm talking about money! About these chips, how do you make them? Did anyone tell you I was a fool and will tell you? -You'll say! -When you bring the ghoul,
the phoenix, and the loyal horses, I'll tell you. Take care... Taiwan will lose much if it keeps this secret to it self. Good job! You said it this time... Taiwan. At least give us internet... any small subscription. I prefer my coffee with medium sugar. Hello my dear viewers. Welcome to a new episode of El-Daheeh. On October 10, 2024, the Taiwanese president, Lai Ching-te made a statement on the Taiwanese National Day saying that Taiwan isn't under the authority of China, and China doesn't represent Taiwan in any way. He made this statement on Thursday and felt that
he and everyone were satisfied with these words. Four days later, on Monday, October 14, China performed a huge military maneuver. What were they doing? They were practicing surrounding the island of Taiwan. Listen to this, 90 airplanes entered the Taiwanese airspace in 125 flights, where helicopters and drones participated. There was also a marine attack using 17 ships. All of these surrounded the Taiwanese island. Today, this maneuver is known as Joint Sword 2024B. Four months prior to this, in May 2024, an exactly similar maneuver was preformed called Joint Sword 2024A. This happened directly after the Taiwanese president
came to office. The aim behind these maneuvers was summarized by the Chinese army's the spokesman, Wu Qian, he said that there is a sword hanging above the head of any Taiwanese person that calls for independence. Wanting to be independent is wanting to be beheaded. "Excuse me, Abo Hmeed, I feel like this is a luxury episode. I would've cared about this if I was Korean, and this war was happening publicly in Asia. However, we're here, in the Middle East, and this war is happening in Asia. Not our business." Let me tell you that this isn't a
regional issue, my friend, but a global one. We have to pay attention to it. During his term, President Biden announced 4 times that the invasion of Taiwan by China will lead to a direct military intervention from the US. Biden announced this 4 times, my friend. We don't know if he was stressing it or if he forgot that he did. After what happened, the US interfered. Therefore, we could see an actual war, not a cold one, a war between the world's two biggest economies, and both of them possess nuclear weapons, God protect us! This is a
threat to the whole planet. It got so ugly to the point that the US general Mike Minihan, commander of the Air Mobility Command, which contains 50k elements and 500 air crafts, sent a memorandum to the officers under his command telling them that they should prepare for a war in 2025, and that the US will fight in a war. He said so because this is a perfect time for the Chinese president to attack Taiwan. If you think about it, you'll find that this the time that the US and Taiwan will be busy with the results of
the presidential elections. Therefore, some US generals believe that China can wage a war on the US this year. Of course not everyone agrees with these expectations, some people expect that this could take more time and happen in 2027. Why 2027 exactly? Because this will be the 100th anniversary of the establishment of Chinese People's Liberation Army. So they might think about aligning the war with the anniversary. Can you imagine that some leaders could actually think like this? We'll do it on the anniversary, so it'll be a good omen, and so we don't lose count. What did
you do 100 years later? Invaded Taiwan. "I feel like you escalated it, Abo Hmeed. I don't need another world war. I'm on my last straw. The planet is burning. I can't predict what will happen to the plant 2 months later. I feel like I'm driving in a thick fog on the highway using a neon lamp." Can you calm down and let me finish? In fact, the dispute between the US and China about Taiwan didn't start out of nowhere, but it's more than 70 years old. What's terrifying about this today is that it's the first time
for the US to abandon its policy towards Taiwan. What is this policy? It's known as Strategic Ambiguity, it's like strategic trickery or blurriness. Today, the US announces that it'll act in plain sight, it won't be mysterious or difficult to figure out its next move, it'll clearly fight. If Taiwan is attacked, we'll fight the Chinese without any hesitation. Now that I've told you about the war, let me surprise you that the attitude of the US and China towards Taiwan is the same officially. For example, the US doesn't recognize the Taiwanese government. The same US that will
fight China for the existence of Taiwan doesn't acknowledge the existence of Taiwan, it only recognizes one China, the one ruled by Xi Jinping. It recognizes the China whose policy says that Taiwan is a Chinese county. Let me surprise you that in this entire planet, only 12 countries recognize Taiwan. I'm sorry, but these countries don't even take part in the World Cup, these are weak countries like Guatemala and Haiti. With all due respect to our fans there! However, most countries of the world don't recognize Taiwan's independence. Listen to this contrast, my friend. The security and flourishing
of Taiwan will still depend for years on the support of the US and western countries that don't recognize it. Using the language of Twitter, we can call this a situationship. Do they support Taiwan? Yes! Do they not want to recognize it? Also yes! It's like the case of ʿAntarah ibn Shaddād. Whenever his father saw him fight, he would admire his combat skills. However, when he asks his father if he'll recognize him, He tells him "Go away! Piss off! Go away you Zabībah's son. You call yourself Shaddād's son! What a joke! This boy ʿAntarah is a
good fella, he's strong and a poet, but I'll never recognize him." Let me tell you that there's a secret behind this strategic ambiguity. With this ambiguity, the US managed to preserve for years one of its most complicated external relations, its relation with China. In order to understand this complication, as usual, we need to go back a little further. If we rely on Chinese sources, we'll return to the 2nd century, when the Chinese emperor sent an exploration force, and this force managed to join the Taiwan island to China. Congrats to China! Ever since then, Taiwan became
a Chinese land according to the Chinese narrative. However, if we rely on western sources, we'll go back to the 17th century. The Chinese reached the island of Taiwan step by step, when the Dutch settlers needed them as workers on the island along with the indigenous people of the land. In this narrative, the Chinese are considered a foreign element on the indigenous Taiwanese. They're just like the Dutch settlers. Maybe the most important period in our story is the one between 1839 and 1949, or as the Chinese call it Century of Humiliation. During this period, China was
yielded to and internally disunited between war lords. It also caught the attention of foreign countries, especially Japan, as when it defeated China in the First Sino-Japanese War, it occupied the island of Taiwan in 1895. That's when we saw the first Japanese colony in history. The truth is that the Japanese occupation was a humiliation to China as expected. No one likes to be occupied. However, it was a paradise to Taiwan. The Japanese turned Taiwan into a paradise of infrastructure. They turned it into a full modern nation with sewage lines, a strong infrastructure, a railway that connected
the island from east to west, and economic facilities like the central Bank of Taiwan, which mints a currency for Taiwan. "Wow, Abo Hmeed! The Japanese are so kind, so is their occupation. I've liked them since the Japanese trick on PlayStation 1, where you press up, up, down, down, left, right, left, right, X, then O, and unlock the International Team and the European Team and you can play with both." You idiot, there isn't a kind colonization. It's very difficult, my friend, I'm trying to find it. It's hard to find a colonizer with a true good intention
towards the one they colonize. Whenever a colonizer wants to help the colonized, the colonizer must believe that he's better than the colonized, and the colonized are not even people, so the colonizer wants to turn them into only 75% humans. According to Abdulrahman Gawish, colonization fodders not nourishes. Japan considered Taiwan to be an Agricultural Appendage or a food basket, where they could plant crops like rice and cane. Needless to say that most of these crops was exported to Japan using the railways that Japan built from east to west of Taiwan. Venmo didn't exist back then, so
all transactions were done through the central bank that Japan also built. The colonizers would say "What more do you want you greedy colonized! We planted your lands, built you railways, and built you a central bank, all at the cost of nothing. What more do you want! Shame on you!" It was logical for Japan to take care of Taiwan and turn it into a developed colony, so it would continuously provide food for the Japanese, especially in the case of a big country like Japan. Taiwan kept developing more and more, my friend, and its infrastructure became stronger.
The problem is that this development exceeded beyond limits, to the point that Taiwan became the second most developed place in Asia after Japan. During a period, the Gross National product per capita in Taiwan was equal to Japan. Therefore, a Taiwanese person was equal to a Japanese one in case of money and finance. Due to this development, the life expectancy increased from 29 to 45 years. The situation remained the same until World War II, my friend, which you know what it did to Japan, in Hiroshima and Nagasaki. After this, Taiwan's fate completely changed. The ones who
controlled them weren't doing so anymore. According to what's known as 'The Cairo Declaration' between China and its allies, China retrieved Taiwan. China was led then by the national leader Chiang Kai-shek, leader of the Kuomintang ruling party. He appointed Chen Yi as a leader of the island of Taiwan. The first thing he did to the Taiwanese was to consider them second-class citizens, and not just that, but also Japanese Sympathizers. They lived in the paradise created by the Japanese enemy for more than 50 years, to the point that subjects were taught in Japanese in their schools. Because
of this, China ruled Taiwan after World War II with an iron fist and a horrifying oppression that will lead us to the spark of the revolution known as the February 28 Incident, 1947. This happened when a governmental agent caught a Taiwanese girl with contraband cigarettes and shot her with his rifle. Then, a fight broke out between the Taiwanese and the security. This fight gradually transformed into a popular uprising against the Chinese ruling of the island. At that time, Kai-shek, the Chinese president, sent military forces to kill, imprison, and kidnap from 18,000 to 28,000 Taiwanese. Let
me tell you that the whole elite and educated class of Taiwan was killed or imprisoned. Kai-shek hardly managed to end the revolution, but of course it ended with an international scandal, specially since reports about the violence of his troops spread around the world. One of the weapons his troops used was the Dum-dum bullets, which were internationally banned. These bullets explode inside the body. However, the hardest thing that China suffered from wasn't the scandal, but it was creating fierce animosity between the island of Taiwan and the Chinese regime. If you watch El-Daheeh regularly, my friend, and
watched the China episode, that I highly recommend, you'd know that the situation didn't end well with handshakes and stuff. Maybe the president was globally hated, but the actual disaster lied internally. There's someone called Mao Zedong, the Father of Modern China. That's how his name is said Mao Zedong, the Father of Modern China. He put an end to the ruling of Kai-shek. It seems that the Taiwanese are close to God, my friend, they complained to God about Kai-shek and woke up on October 1, 1949 to what surprised them and the whole world, the Communist Party taking
command of China. The People's Republic of China was announced. Suddenly, Kai-shek and his supporters, who were almost 2 million, found out that the only way to escape execution was to flee from China. Where did they go? Of course not to Japan, as they were already in a war with them. They went to Taiwan. He fled to the place which he degraded its people. The Taiwanese were surprised, my friend, that the dictator who ruined their lives and revolution settled in their island along with his people. Mao Zedong started preparing to occupy Taiwan. He already invaded China,
it's time to expand. He did this not only to join the land that he believed belonged to China, but also to destroy everything that remained from the old regime, Kai-shek and his people. However, when the war between North and South Korea broke out, Mao was shocked by the USA, which supported South Korea. We find that the US protected the island of Taiwan as a part of its military strategy in order to protect the important Pacific Ocean from the communists. "I mean, the USSR, the Soviet Union is a communist, and Mao was a communist, if they
cooperate, we're done for!" Take care, my friend, these were the early signs of the Cold War. With the start of the Cold War, the US refused to recognize the communist China and considered the government of Kai-shek, which was in Taiwan, like a small gang that resided in a far neighborhood, to be the government in exile and the only representative of China in the UN. An island that is only 36,000 square km in area became the representative of China to the west, while the country that is 9 million square km in area and millions of people
wasn't recognized by the world. "Sorry, I have a bad eyesight, I don't see communists." I want you to imagine that you're in a time machine going back to 1950. You go to the coast of this island, meet a person from that era, and show him your phone and the information about Taiwan nowadays on it. Firstly, he'll say "A television in the size of a cigarette now! Wow!" Secondly, he'll be surprised that the internet says that Taiwan nowadays is one of the 25 biggest economies in the world with a Gross Domestic Product of more than 800
billion USD. This is as big as the Saudi economy, my friend, in just 36,000 square km. According to a report issued in 2022, the GDP per capita exceeded that of a country as big as Japan, which colonized and built Taiwan. If you show this information to someone from the 50s, they'll call you crazy because the reality back then was completely opposite to this. Seventy years ago, in 1950, Taiwan experienced its worst conditions ever. It was a small island the hosted almost 2 million refugees. Suddenly, its population increased by 25%. These refugees weren't quick guests that
would only stay for the night, one of them was a dictator who wanted to turn the island into a military base and use it to retrieve China. At that time, Taiwan started to suffer from a huge inflation, the GDP per capita was less than that in places like Congo and Madagascar. That happened because most of Taiwan's budget was dedicated to building defense and preparing for the upcoming war with communist China. Taiwan was led by Kai-shek and survived off of aids from the US as you can see. "How did this drastic change happen despite how bad
the situation was? Nowadays, Taiwan is big among nations, how did it acquire all of this quickly?" What happened was one of the greatest political and economic changes and one of the greatest transformations any country could do, and not a normal country in normal conditions, this country was surrounded and threatened by a great power. The topic got hotter. I'll come back to continue. Blow on it, it might cool down. The Kuomintang government continued practicing its dictatorship and politically oppressing the Taiwanese. During its reign, this was known as the White Terror. On the economic level, the government
realised that this situation wasn't right. All of them, citizens or governmental people, lived on a small island, they were literally in the same boat. This boat carried a huge population density, if they don't run it correctly and retrieve the economy, they'll die. The government started a plan of land reform along with the program of import substitution, or the local products, like some random products, just support the local products. We'll decrease importing in order to preserve hard currency. This step allowed labour-intensive industries like textiles and fertilizer, where the local product was completely protected because of the
importing restrictions. "Was this enough for the transformation, Abo Hmeed?" That would've been too easy, my friend. By 1958, Taiwan's trade deficit reached 70 million dollars. S. C Tsiang, the economist, told them "Guys! We're a country living in survival mode. We're fighting for survival and depending on aids from the US, and we're not even paying back for it, we're in debt. In order to rise back up, we have to encourage exporting way more than encouraging importing." Then, the government lifted all the restrictions on exporting. "You can export anything you want. You want to dismantle your grandma
and ship her in a package to the US with Amazon? You got it! Just tell us where in New York! We'll export grandmas. We'll export anything that's exportable!" -"Even pickles, Abo Hmeed?" -We already sold it, we're best sellers! The government lifted the restrictions of exporting and put it on importing. They're dribbling the island! Not only did the government remove the exporting prohibitions, but also it preserved the exporters' right of keeping foreign currency. It also encouraged foreign investment in Taiwan. The exports of the textiles industry were worth 2 million dollars in 1975, after the new actions,
the exports reached 29 million dollars. This was only 5 years later in 1962. They achieved a 27 million dollars increase in the 60s, my friend. The Taiwanese economy started booming very fast. During that time, new developed economies started appearing in Asia, in Singapore, South Korea, and Hong Kong. With Taiwan, the four countries formed what's known as the Four Asian Tigers. These are countries that have crazy manufacturing rates, with a low cost and a simple governmental planning, to develop then export. However, when the Asian tigers started moving, the Taiwanese tiger faced the hardest strike in the
70s. It was stabbed in the back with betrayal. "Who did it? Was it Japan? China? Was it because of internal disputes? Tell me! Who betrayed Taiwan?" From the one you least expect, the USA. "Does the US betray people and make vain promises, Abo Hmeed?" It's written in the job description in its passport, "Betraying states." Taiwan was struck by the American ally. On October, 25, 1971, the UN decided to give China's chair to Beijing. This meant that Mao Zedong's China will represent China. Mao Zedong got his account verified, the UN recognized him. Finally, he became the
representative of China instead of Kai-shek's government. This happened when the world was convinced that Mao's regime was here to stay. He was not going to leave easily, so we have to treat him as a status quo. Honestly, it seems that he's hard to be defeated by a bunch of rebels who've been staying in a small island for 20 years. "They were only 2 million on the island, that's nothing compared to China!" Also, when a communist regime rules such a massive country and starts to be economically open with trading opportunities with the world, this would be
much better for the world. Instead of dealing with someone who rules a small island, they would deal with the big boss and deal with a country with a huge population and opportunities of building factories, aggregating lands, and trading. After this recognition, Kai-shek and his government's dream of returning to rule China one day was threatened. They call it Main Land China. This dream died in 1972, when the US president Nixon surprised the world with a resolution strange to the Taiwanese. The US president visited communist China for the first time. [Nixon] [Mao Zedong] [Kai-shek] "You don't have
to say, what you did, [Nixon] [Mao Zedong] [Kai-shek] I already know, I found out from him." The US president's visit to China was sudden. Maybe it was a quick visit that lasted for only 8 days, but it's known historically as the "Week That Changed The World." In his book Evan Thomas said that Nixon and Henry Kissinger, his National Security Advisor, slowly observed the disputes that appeared between the People's Republic of China and the Soviet Union. "There are disputes between them already. Let's get them on our side, so they'd leave the others alone. It's the divide
and rule policy. Get China on your side, so they'd oppose the Russians the next day." For example, they observed Mao's fear of the Soviet expansions in Asia. At that time, the US joined the dispute cunningly and escalated the situation. "You don't know what they said about you, unbelievable!" The US increased this animosity when it made economic relations with Mao's China as well as political relations. "So you communist China is making friends with the US? This betrayal got really good!!" [Nixon] [Mao Zedong] [Soviet Union] "Someone will love you, [Nixon] [Mao Zedong] [Soviet Union] but someone isn't
me." The genius idea of the US was a success to the US and even Mao. When in 1979... "Hold on a second! You're diverting my attention from the main topic. We're here to talk about Taiwan. You're telling me about a love triangle between the US, Russia, and what else! We're here to talk about Taiwan, how was Taiwan betrayed?" You might think that the betraying of Taiwan came from the US recognizing Beijing's China, but it didn't just stop there. The US government took its support and the legitimacy of the Taiwanese government. In 1979, the world was
surprised by the US taking back its recognition of Kai-shek's government along with its embassy. Let's go back to Taiwan, my friend. Taiwan was in a bad situation, especially the Taiwanese government. As in 1979, the US recognition was taken from it. The US was officially cutting its relation with Taiwan and was telling the world that Mao was the only man in China. Taiwan was stuck between a rock and a hard place. The idea of going to the home land was destroyed, and Taiwan's government remained in Taiwan. Imagine having such bad luck to the point that the
two sides fighting in the cold war have different governing methods, management, economy, population densities, and geopolitical map, but they work together against you. "Tell the Taiwanese in the past not to worry, tell them to work on the economy, manufacturing, and exporting. The economy will protect them." Honestly, my friend, the world is lucky to have such a naive person in it. That's not how things are run! Until today, the Chinese policy directly pressures any country that wants to cooperate with it and strengthen their economic ties to refuse and decrease cooperation with Taiwan. "No one should treat
Taiwan as an economic partner or a separate entity from China. If anyone talks to them, I won't be their friend. Taiwan is mine!" Today, we know that there are 12 countries that recognize it, back then, they weren't 12 and some weren't even countries yet. Taiwan could have an economy and exporting of products, but no one wants to trade with it because everyone is afraid of losing the possibility to trade with hundreds of millions of people, or China. If someone trades with them, they'll sacrifice trading with China. Therefore, no European or any other country would trade
with a small island and sacrifice the massive entity of "Made in China." Taiwan was in a state of political and economic isolation, despite the continuous US support to weird things. You can see this part in the episode about chip wars titled "World's Most Important Industry." Taiwan realized that it can't depend on western countries to protect it, they're double-faced allies. It also can't work on it self to achieve a normal economic recovery anymore. Taiwan had to go all-in. It had to devote all of its resources and focus to a massive industry that could provide it with
protection and income. This was the most important question in the late 70s. "What are we going to produce to protect ourselves and become strong?" The answer to this question will determine the fate of Taiwan until this moment. Taiwan spent 5 billion USD in the 70s on developing industries like petrochemicals. However, in 1979, an international crisis in petrol occurred after the Iranian revolution had happened and the Iranian production of petrol had decreased with an average of 4.8 million barrels. Back then, this represented 7% of the international production of petrol. As a result of this, the prices
of petrol skyrocketed. The political crises that happened back then changed this industry into a variable one, and its prices were connected to political things that Taiwan couldn't control. The price of a petrol barrel kept changing. Taiwan realised that it needed a more independent industry. Taiwan started determining the specifications of the industries that could save it. One of the most important specifications was to have a high level of technology, doesn't depend on energy that much, can create labour, and is highly needed by the international market to the point where the whole world would be forced to
import it from an outcast island. "You're boycotting me? All right then!" When Taiwan manufacturers and exports something like this, it'll provide hard currency. All of these specifications are only available in the field of electronics and high tech, my friend. The Taiwanese government started supporting this field by building the Industrial Technology Research Institute (ITRI). It was founded in 1973. The Taiwanese government conditioned for the results of this place to be sent to factories non-exclusively because all electronic industries had to be developed. "We'll apply any new scientific discovery to this!" In 1980, the HSBIP was founded. You
know how the films 'Ocean 11,' 'Ocean 12,' and 'Ocean 13' were produced in the US and you find an off-brand Ocean 14 produced somewhere. It's the same but with a better quality. It's like Taiwan copied the homework. They saw what that place in the US called Silicon Valley does and did it. They built the HSBIP, an entity that's an intentional replica of Silicon Valley. All of these factors along with national cadres in Taiwan established an industry that is the most important one today, the industry of semiconductors. This industry changed Taiwan from a swift Asian tiger
into an economic ghoul that the economies of modern technology of the world depend on -completely. -"Wha..." Completely! The revolution of AI today depends on Taiwan. There is no AI revolution without Taiwan, it can't happen. The AI revolution can happen without England. The AI revolution can happen without Germany. The AI revolution can happen without China. But it's impossible without Taiwan, this area of 36,000 square km. It's not a coincidence that it's "T" and "wan" with "ai" in between. Before reaching this stage of shining of Taiwan, China observed all of this and was preparing a new plan.
How could they bring down the Asian tiger that's growing. You might think that the way to end this was for China to fight Taiwan, to invade it quickly before it builds this important industry and becomes important and the world can't do without it. Let me surprise you that China dealt with things in a more clever and less violent way. In the 80s, China decided to deal with Taiwan using the plan of Hong Kong. Hong Kong lived as a British colony for more than a century. In the 80s, China and Britain signed a treaty that Hong
Kong, which lived as a colony for years and build an special identity and a different system from communism, would return to China but under the concept of one country, two systems. It's where both are one country but follow different ruling systems. This meant that Hong Kong would have a political system and economic freedom, everything it asked for in the order, but it would be under the authority of China, and follow it diplomatically and militarily. China thought of doing something similar to Taiwan, which went through the same experience with a different colonizer. China visited Taiwan in
the 80s wearing all white with a completely lit up face and told it "Taiwan, we'll ease the economic blockade, be your commercial partner, and allow you to develop and build factories even in China if you'd like instead of this state of economic independence and escapism that you're doing. Come on, guys, even a worm will turn, so even countries or colonial powers fight. It was just a moment of anger that lasted for a couple of years. Nothing happened! Come here! Give me a hug Taiwan! Come here." According to the professor Steve Tsang, the aim of this
plan was to make Taiwan depend on China economically with time, in a way that turns any future chance of independence into an Economic Suicide. "So after all of these years, Taiwan, we ate, drank, exported goods, and built factories together, and you want to abandon us? Go ahead! I wanted to end this relationship in a better way, but, unfortunately, you're the one who's going to lose because you depend on me politically and economically, and there common factories and trade between us. I'm ready to accept this, if it's what you need." While the plan was going great,
the godfather of developing technology in Taiwan Li Kwoh-ting called for the Chinese American engineer Morris Chang. Remember this name well! He was the big boss in Taiwan, and the one catching all eyes, my friend. In 1987, he established a company known as TSMC the Taiwan Semiconductor Manufacturing Company. We talked about the cleverness of this company in an old episode written by yours truly, titled "Chip Wars." Listen, my friend, don't watch any other episodes of El-Daheeh, just watch this one because I wrote it. [El-Daheeh's team] However, let me summarize this great episode in even greater words.
Semiconductors are chips, my friend, that can pass the current and control its passage, my friend. It's something that can resist electricity variably. These features make it essential in the manufacturing of any electronic device. It's in any device you can think of, phones, televisions, and even airplanes, this industry takes part in it. Let me tell you that the huge manufacturing companies of these chips, like 'Intel' and 'Samsung,' followed the model of IDM Integrated Device Manufacturing. This means that they design and manufacture. We'll design and manufacture the chips and fully build the device, no matter what's the
device. Morris Chang realized that the development of the chips needed an entire facility, one that's specialized in this, has nothing to do with any competitions, and can develop, manufacture, and sell to everyone. Companies could compete about the design, but all of them come to us to manufacture. The problem appeared in 2010, my friend. Apple used to buy the chips for the iPhone from Samsung, and Samsung used to supply Apple with these chips. Samsung's manager said "Wait what! How much do you make from these phones. Why don't we join this phone market?" Apple realized the problem.
How could the one who makes their chips become their competitor? It's not a conflict of interests, more of sharing interests. Then, Apple entered a historic contract with the TSMC company. Let me tell you that the revenues of Apple's iPhone reached 199 billion dollars today. The more phones you sell, the more chips you'll need. You can say that Apple took TSMC by the hand. "Let's go, go become huge!" The revenues of TSMC today reached 75 billion dollars. The information I'm about to say were said in the Chip Wars episode. Nowadays, only one company controls 50% of
chips of the world. Only one company controls 95% of the world's advanced chips. That one company is TSMC. Go continue the episode and we'll return to Taiwan. Taiwan's entrance in this field created a unique technological overlap between the 3 main characters of our story, Taiwan, China, and the US. The technological overlap between the US, Taiwan, and China is almost equal to the political overlap that 'The Economist' magazine described as a love triangle. The sides of this love triangle sometimes love and sometimes hate each other, but they depend on each other at all times. Even though
history explained everything well, let's explain it technologically in the simplest way possible, using an example that you know, the iPhone. According to a report by 'Financial Times' titled, the iPhone that appeared in 2010, and 4.2 billion pieces of it were sold and achieved trillion dollars in revenues for Apple is the greatest embodiment of the love triangle we mentioned between the US, China, and Taiwan. If you check the device, you'll find that 36% of the raw materials used in its manufacturing comes from the products of Taiwanese companies, like the processors, wifi chips, and 5G modems. But
the high performance materials come from the US, like the glass comes from Corning company and gluing materials from 3M, and that's the share of the US. Finally, China takes part in the least technological part, assembly, 95% of places that assemble iPhones are in China. According to 'Financial Times,' iPhones are assemblies that were created by a clever supply chain. This isn't thanks to Steve Jobs, my friend, it's thanks to Apple's current CEO, Tim Cook. Tim Cook is probably the reason Apple makes these huge profits by organizing the process of the supply chain. The iPhone was a
masterpiece, it was released despite the political tensions between the manufacturing countries. That's why attacking Taiwan turned from a political topic, that's discussed in diplomatic meetings and UN gatherings, that we know are useless, into the most viral topic and and the most important concern of all technological companies. According to Yong-Fen Hsieh, the founder of Matek company that test the chips, if Taiwan is attacked, the industry of technology and electronics world-wide "will be screwed." That's because 61% of the global market of semiconductors, that operate phones, computers, F16 planes, F35 planes, and all of this, lies in the
hands of TSMC. Even my presence lies in the hands of TSMC, my friend, so if anyone gets near Taiwan, I'll make it ugly. Taiwan managed to become extremely important using technology, to the point that the G7 summit in 2023 called for the amendment of the supply chain. Intel, Google, Meta, and Amazon confirmed that for them to continue working, make an economy and business, operate television, use YouTube, and operate the systems that run the health care, armies, and all of this, this important industry must be produced by TSMC and Asia. We're in deep trouble. There is
a country this big and another big terrifying one next to it with nuclear weapons that thinks it owns the small country. Get this industry away from this tense place and bring it to the US, really! Come build your chips in Ohio. We can't stay under Taiwan's control, which if a blockade was put on it, not even a war, according to Rhodium Group this would endanger economic activities that are worth up to 2 trillion dollars. They'd put 2 trillion dollars in danger. Imagine that an island carrying the technological economy of the world lives under a gun
pointed by a great power like China promising to occupy it at any point. It doesn't take "no" as an answer. According to The Guardian, most Taiwanese have a plan in case China occupies it. The plan revolves around all of them escaping to TSMC's headquarters. They would never attack it, as China would stop. If the world destroys or allows the destruction of TSMC, it'd be a disaster. The age of technology would end, and we'd go back to fighting with sticks, that's if we even find the sticks after the cutting of trees in the Amazon. While Taiwan
made the whole world depend on it too much and got the world involved economically in protecting it from China, politically, it ruined the its last possible chance to join China. In the late 80s, the Democratic Progressive Party appeared, which was an opposing party in Taiwan. This party called for a shift to democracy, along with Lee Teng Hui as the first president of Taiwanese, not Chinese, origins, or as he's called in Taiwan Mr. Democracy. Finally, Taiwan ended the period of white terror, which we mentioned earlier in the episode, under which it lived for centuries under the
management of the Chinese government in exile. The new identity of millions of Taiwanese that appeared after the democratic shift corresponded with only one thing, that Taiwan is an independent country. After all the sacrifices the Taiwanese made and the terror they experienced for years, they would never choose to return to a harsh country like China. China was about to go crazy. In 1996, China launched missile tests. Where? On the coasts of the island of Taiwan. Why? In order to scare the people who were going to vote for Mr. Democracy. These tests forced the US to join
the picture and present the biggest military parade of its forces in Asia back then. We haven't seen such a parade since the Vietnam War. "Don't stretch it, they lost in Vietnam." But the show was top-notch. These were the early stages of the modern war of maneuvers that we talked about. Despite the economic development of Taiwan through semiconductors, the shift to democracy was the biggest hit to China. Only then, China realized that there're no more attempts left to seduce Taiwan. "We won't be able to become economic allies, but what's even worse is that Taiwan became a
democratic model that's right next to us." It's dangerous for the democratic model of Taiwan to be next to an autocratic country that's ruled by a single party. That's why China issued the anti-secession law. This is a law that confirms China's right to retrieve Taiwan. It's a persistence that was met by a huge refusal from the new Taiwanese generations, refusal of China's dictatorship. By 2014, movements led by the youth appeared in Taiwan like the Sunflower Movement, which opposed to new trading agreements with China, as these agreements could force Taiwan to surrender to occupation in the future.
"China keeps messing around and wants to occupy us again! Be careful Taiwanese!" When the Taiwanese saw the fierce oppression of Hongkongers by the Chinese, when Hongkongers protested against China's intervention in Hong Kong's policy in 2019, Taiwan was certain that what it did was right. If it had agreed to the concept of one country, two systems, this would've happened. "With all due respect to everything you said, Abo Hmeed, this is the story of an island that's successful but surrounded. The Cold War is over now. Why would China or the US wage a third World War on
Taiwan? They could just fool it with politics and diplomacy, and each country takes their chips." What you're saying already happens, my friend. If you look at the chart on the screen, you'll find that China and the US are the biggest trading partners of Taiwan. Even the problem with chips could be solved in the future. Washington is contracting a strong alliance with TSMC, so both would build chips factories in Arizona. This plan is to be implemented in 3 years. Of course Taiwan is not an idiot, advanced chips won't be manufactured in the US yet. That's as
far as we know. "You think I'd give you my specialty product that's keeping me alive, so that I'd find myself dealing with yun!" The first customer of these 2 factories was Apple. It's the first time in the history of the US to have "Made in USA" written on its products with complete honesty. Therefore, the industry would be gradually transported from this dangerously small island, and we'd manufacture the chips, so no one would fight for it. This is what happened in the last 4 years, my friend. in the field of building semiconductors factories. If you look
at the screen, you'll find that there's a crazy race between China and the US with Taiwan. Everyone wants to manufacture their stuff. However, even if this industry extended outside Taiwan, and each country secured its needs, let me tell you that the possibilities of this war will continue forever. It's true that history changes, as well as the economy, its companies and systems, but, unfortunately, geography never changes, my friend. To understand, look at the map. Take a look. Taiwan is 130 km away from China, the Taiwan Strait is on the western side, which is the main trading
route for China, and most of the world's trading containers pass through it. The Miyako Strait lies northern of Taiwan, between it and Japan. The Bashi Strait lies southern of Taiwan, between it and the Philippines. Do you see all of these straits? These are China's main entrances to the Pacific Ocean. Right now, this is the most important ocean in the world. If you take a look at the Chinese military bases on the coast, you'll find US military bases opposite to it in the Philippines, Japan, and South Korea. These bases weren't distributed haphazardly, with this adjacency, it
creates what's called the First Island Chain. This is a chain of islands that blocks China from the ocean, my friend, it isolates China, reducing its marine and trading power. Taiwan exists within this chain, as you can see. If China seizes Taiwan, it would be breaking the chain, and it won't only be breaking the blockade, but also the US bases in the Philippines and Japan would dissociate gradually because their big boss, the US, was attacked in Taiwan. No country of the two would believe that the US can protect it. Especially because they would be fighting something
as big as China fighting in its homeland, which also seized Taiwan from the US. If Taiwan remained under the control of the US, China would remain in a blockade forever. If any Chinese president can tolerate this, the current government can't do it. Xi Jinping, the Chinese president, has a project that revolves around making China a great nation that reigns its lands. A part of this project is putting an end to the century of humiliation that I mentioned earlier. The most important method to do this is by retrieving Taiwan. This the main pillar of what's called
the National Renewal Speech, which Xi depends on to become a greater leader than Mao Zedong, so he'd become China's historical leader. Xi really believes in this dream, my friend, to the point that he set 2049 as a final deadline of the target. This is what he called the Chinese Dream. He said that he'll achieve the Chinese Dream by 2049. Our worst fear is for this dream to become a nightmare to the world, and a nightmare for China. What's an even worst fear is for this nightmare to come true before 2049. After Trump won the presidential
elections, the whole world became frightened, except for Joseph Kahn and Nate Silver because they will make revenues. The world is frightened because the ones ruling the US and China are 2 horrifying men, Xi Jinping, who dreams of eternal presidency, and Trump who says clearly that he has huge problems with China, not just with the management, but with the whole idea of China. Trump and some of his friends are convinced that he's always right. In his speeches, we find Trump threatening China saying that he'll impose sanctions and tariffs that are worth 200% of the normal. On
the other hand, Trump condemned Taiwan's domination of the semiconductors industry, and while US companies pay billions for some chips from Taiwan, Taiwan needs to pay a lot more to protect itself from US forces. That's why if you watch any analysis of Taiwan's future after the recent US elections, you'll find that because of Jinping and his determination and Trump and his swings for his interest, no analysis can confirm anything. There are no guarantees, my friend. We don't know if there's going to be a war or peace. The truth is that the US and China are stuck
in an amazing dilemma, my friend. For both of them, solving their problems would damage their interests. They're stuck in a loop, a state of I hate I love you. No one is sure if one day war would be the only solution for one of the countries, or if everything will stay the same. For many centuries in history, you find that Taiwan's most famous name isn't Taiwan but Formosa. This word came from a legend about a Portuguese sailor who reached the island and the first thing he said was "beautiful island." Even though the Portuguese never lived
on this island, the word became a historical title for Taiwan. As if the legend is close to reality, where a great power regards a beautiful island with greed, maybe they'll never live in it, but they know that the key to controlling it is the same as controlling the world. Maybe the end of the world won't come from Europe, as we always expected, my friend, because it witnessed two World Wars. The end won't also come from Russia or the US, who easily got out of a cold war. The end could come from a far island in
the Pacific Ocean. At any moment, the Pacific Ocean could stop being a pacifist. The phrase "Made in Taiwan" is our only relation with this island. What's certain is that if the whole world witnessed the end of the world, it would watch it from screens that operate using Taiwanese chips. If Taiwan caused the end of the world, it'd show it to you. I don't know if that's good or bad news, however, don't forget to watch the new episodes and the old ones. Check the sources below and subscribe if you're on YouTube. Do you know why there're
problems between China and Taiwan? -Why, Abo Hmeed? -Because Taiwan takes all the chips. Don't make me call you curse words. You're a wizard?