This article examines the relationship between Taiwan’s industrial policy and the development of Taiwan’s semiconductor sector. The aim of the article is to answer the question of how Taiwan’s industrial policy and, more broadly, the Taiwanese development model, contributed to the development of the semiconductor sector in Taiwan and the achievement of a dominant position by TSMC in a key sector of the global economy. The author (Polish diplomat in Taiwan in 2016–2022), based on available literature and knowledge acquired while working in Taiwan, describes individual elements of Taiwan’s industrial policy, such as the foundation of the Industrial Technology Research Institute (ITRI), the establishment of a science park in Hsinchu or the setting up of the first companies in the semiconductor sector (UMC, TSMC), which were milestones in the development of the sector. In the article, the author also analyzes other factors that contributed to Taiwan gaining a dominant position in the foundry business and compares the Taiwanese development model with the development model of other Asian countries (Japan, South Korea, Singapore, Malaysia).