The Japanese had colonized Taiwan in 1895 and had launched a program of industrialization in the south of the island, making Kaohsiung the leading manufacturing center and the main port. Japan had also instituted modern education in Taiwan and children from the elite families often studied in Japan. Therefore the Taiwanese were accustomed to high standards of education, the manufacturing culture and and the practice of studying abroad.

When World War II ended, Taiwan was returned to China by defeated Japan. The local population was well-versed in Japanese culture, not in Chinese culture, and the native language of most Taiwanese was Hokkien, not Mandarin (and still is today, although 80% are also fluent in Taiwan's version of Mandarin, known as Guoyu or Huayu). When Chiang Kai-shek's government fled to Taiwan in 1949, the "mainlanders" who followed him created a new social class, which ruled the political sphere and was often wealthier.

The first wave of Taiwanese immigrants included many who started by joining a US university as graduate students and then were hired by US companies upon graduation. This was the time of the Cold War between the USA and the Soviet Union (and indirectly also Mao's China, although Mao's China was still very poor), a time when the USA was recruiting high-skill talents from all over the world. The USA provided grants and scholarships to help good students do so. The USA was in the middle of a long economic boom that had started in 1958 and would end only 15 years later in 1973, a period during which unemployment remained at a record low (3.4% in 1968, still unbeaten in 2024): the US economy needed immigrants, and especially skilled immigrants. The Taiwanese who migrated to the USA in the 1950s were often mainlanders who had escaped to Taiwan, or, better, their children, sent to study to the USA in order to provide the family with a second option. The number of Taiwanese students in the USA steadily increased between 1950 and 1965 (1416 in 1950-54, 2645 in 1955-59, 6719 in 1960-64) and stabilized at about 2,000 per year between 1965 and 1974. Because of poor English-language skills, many of those born before 1945 went to study in Japan rather than in the USA. The reason they didn't stay in Japan was that Japan didn't provide a path to citizenship (and not even to permanent residence) for Taiwanese immigrants. The Japanese government was also in cahoots with the Taiwanese dictatorship, and Taiwanese students or professionals suspected of pro-democracy activities were often kidnapped in Japan. During the Japanese colonial period, the favorite field of study for the Taiwanese had been medicine, and naturally that turned out to be a favorite subject also for the students who went to the USA.

After graduation, the Taiwanese students easily found employment at a time when the USA was recruiting highly-skilled talents from all over the world for its electronic, aerospace and nuclear industries during the Cold War, as well as physicians for the "baby boom" era (1947-61). In fact, many found employment in the military-industrial complex despite not being US citizens.

For example, Taiwanese-born chemist Yuan Tseh Lee (Yuanzhe Li), who arrived in 1961 to study at UC Berkeley, became in 1986 the first Taiwanese-born Nobel laureate for work he conducted at the Lawrence Berkeley National Laboratory. Taiwanese physicist Chenming "Calvin" Hu, who arrived at Berkeley in 1969, went on to develop the FinFET (fin field-effect transistor) in 1999 at UC Berkeley, hailed at the time as "the invention that saved Moore’s Law". Pauline Leung (now Lo Alker), raised in nearby Hong Kong by Guangdong parents who had fled the communists in 1949, studied in Arizona thanks to a scholarship and in 1965 reached Silicon Valley where she rose through the ranks of General Electric, Amdahl, Four Phase, Intel and Convergent to become a powerful executive (in 1994 she led the most successful IPO yet in Silicon Valley, Network Peripherals).

After 1965 the majority of Taiwanese immigrants were college-educated, and they were coming from Taiwan or Hong Kong. For example, Winston Chen (of Solectron fame) joined Harvard from Taiwan in 1965 on a graduate fellowship. Also, the Chinese-born David Lee (of Qume fame) was raised after 1949 in Taiwan. David Lam (of Lam Research fame) was raised in South Vietnam, which was first a French colony and then a de-facto US protectorate. One of the Taiwanese who arrived in 1965 was the 13-year-old David Ho (Da-I Ho), who reunited with his father, who had arrived in 1957 under the Magnuson Act. Ho later became a famous virologist at Columbia University and in 1996 was named Time magazine's "Man of the Year" for his contribution to curing AIDS. Taiwanese mathematician Bang-Yen Chen arrived in 1968 and quickly became one of the world experts in differential geometry.

After 1949, Taiwan's scientific and college population consisted of two different populations: the native Taiwanese and the refugees from the mainland who were escaping Mao's communist regime. The native Taiwanese were privileged among the Chinese population by the fact that Japan (which had ruled Taiwan between 1895 and 1945) had instituted modern education in the island, and that many Taiwanese had studied in Japan's best universities. It wasn't a difficult mental step for a Taiwanese to think of finding employment in the USA or enrolling into a US university. The families of mainland China that had moved to Taiwan in 1949 (the refugees) were often from the elite social classes of the mainland, the ones penalized by communism, generally highly educated and relatively wealthy, i.e. they could afford to send their children to study in the USA. It was psychologically easy for those college-educated Chinese who had moved from the mainland to Taiwan to think of making one more move and head for a US university. Indirectly, by constantly threatening Taiwan, Mao's regime encouraged college-educated Chinese refugees of Taiwan to emigrate to the USA (just like in the 2020s Xi's regime is indirectly encouraging a new generation of Taiwanese entrepreneurs, investors and scientists to move to the USA). Chiang Kai-shek's regime also contributed indirectly to the exodus of Taiwanese brains because it enacted strict migration controls: the Taiwanese were generally not allowed to travel (martial law was lifted only in 1987) but there was an exception for studying abroad.

After 1965 Taiwanese immigrants came to include physicians, dentists, engineers and scientists, migrating with their whole families in search of a higher salaries, safety and freedom. In 1965 only 47 scientists and engineers emigrated to the USA from Taiwan, but in 1967 the number increased to 1321. By 1980, only 5.4% of Taiwanese adults had a college degree but 61% of adult Taiwanese immigrants in the USA had one. Taiwan was still under martial law with an uncertain future. And Taiwan's dictatorship was not any better than Mao's dictatorship on the mainland: the Kuomingtang party spread “white terror” through detentions and executions. All the main pro-democracy leaders were arrested in the "Kaohsiung Incident" of December 1979. Taiwan's government even maintained a network of spies in the USA that reported back home those who engaged in pro-democracy activities, who were then blacklisted and denied reentry if they tried (in 1984 Henry Liu, who had written a book critical of Chiang, was murdered in the Bay Area). Taiwanese were allowed only in 1976 to leave the country for tourism.

The exodus accelerated in the 1970s and 1980s, when an estimated 20% of Taiwanese college graduates went abroad for higher degrees (18537 in 1975-79, 26626 in 1980-84, 35233 in 1985-89). More than 100,000 young Taiwanese left to study abroad between 1950 and 1999. In the 1980s probably only 8% of those who left returned to Taiwan upon completing their masters or PhDs.

The migration of so many students and researchers resulted in a massive "brain drain" for Taiwan: in 1980 a whopping 61% of the adult Taiwanese immigrant population in the USA held a college degree, compared with a meager 5.4% in Taiwan itself. Ironically, Chiang Kai-shek's regime often also forbade college students to return to Taiwan if they were suspected of having become too fond of democratic values, viewing them as potential troublemakers. Taiwanese students made up a significant percentage of international students in US universities well until 1990. By 1975 there were more Taiwanese students than Canadian, Japanese or Indian students in the USA (and virtually none coming directly from mainland China, which remained completely isolated from the rest of the world until Mao's death in 1976). Employment-based immigration of Taiwanese peaked in the 1960s when the USA was desperate to import doctors and nurses due to shortages in US hospitals. During the 1970s Taiwanese migration shifted from college admission towards family sponsorship, peaking in the early 1980s, but even the family members were generally college-educated (in Taiwan).

Wealthy immigrants from Hong Kong and Taiwan demanded better housing conditions than Chinatown. Realtors understood that they were ideal buyers, and started pitching prime properties also to Hong Kong and Taiwanese families, than just to white families. For example, in 1972 a realtor named Frederic Hsieh (a Hong Kong immigrant himself) started pitching homes in a white Los Angeles suburb called Monterey Park, that already had the largest Chinese population outside of Los Angeles' Chinatown, to wealthy Taiwanese, and soon that suburb was known as "Little Taipei" with a population of mostly Chinese. Monterey Park was the vanguard of the Chinese “ethnoburb" (a suburban ethnic cluster). Chinese immigrants spread to neighboring towns of the San Gabriel Valley and in the 1990s the San Gabriel Valley surpassed Los Angeles' Chinatown in ethnic Chinese population and business. Monterey Park is an example of the “suburban Chinatowns” created by Taiwanese immigrants. Another example is Flushing in the New York area.

The old urban Chinatowns of San Francisco, Los Angeles and Sacramento were not appealing for the new immigrants. The Chinatowns represented an older generation that hung on to old traditions whereas the new immigrants were often "westernized" and were eager to integrate in the multi-ethnic US society. The Chinese who settled in Silicon Valley in this period had little in common with the older generations of manual laborers, fishermen and farmers who had come from Hong Kong and Guangdong province and who lived and worked in San Francisco's relatively closed Chinese neighborhoods. Silicon Valley's new Chinese immigrants were networked with the East Coast and Asia and more interested in a single-family, detached, suburban house with lawn and swimming pool. Chinatowns became mainly tourist destinations.

The plight of the poorer Taiwanese immigrants and of the very few mainland Chinese immigrants is less well documented, but it is visible in the thousands of Chinese restaurants and small businesses scattered throughout the USA. As far as the lower classes go, it was generally still single men who moved to California. While the young people from wealthy families came to study, the poor ones came with little money, worked multiple jobs, saved money, over time bought their own business, and then worked even harder to make their business succeed. They often found a wife back home and brought her to California. Over the years, thousands of "mom and pop" businesses were created by such humble immigrants.

The "brain drain" was not completely negative, otherwise Taiwan could have easily stopped it: the students and scientists who did return to Taiwan helped Taiwan start its own high-tech industry. For example, Taiwanese physicist Chih-yuan Lu studied in the USA and returned to Taiwan in 1978, worked at Bell Labs for a few years, and returned to Taiwan again in the 1990s to work on Taiwan's first submicron manufacturing technology.

The normalization of diplomatic relations between the USA and mainland China in 1979 created anxiety among the Taiwanese that the USA would abandon Taiwan. Likewise, Hong Kongers felt uneasy. Therefore in the 1980s an increasing number of Taiwanese and Hong Kongers relocated to the USA simply out of fear of mainland China. The loophole of the tourist visa opened the floodgates for wealthy Taiwanese families to travel to California and buy up homes in the suburbs of the Bay Area and of Los Angeles. These were businessmen who had gotten rich under the export economy in the period of the "Ten Great Projects" (大建設) of national infrastructure launched in 1974 (six in transportation, three in heavy industry and one in nuclear power). As more Taiwanese families settled in the "Little Taipeis" of California, they drove the same secondary immigration that the "Gold Rush" immigrants had generated: Taiwanese restaurants, grocery stores, bookstores, etc. Taiwan's “brain drain” generation of the 1950s-70s, many of them Hokkien-speaking migrants, was replaced in the 1980s and 1990s by these businessman immigrants who were generally more cosmopolitan.

Unlike the Chinese immigrants of the "Gold Rush" era, immigrants from Taiwan were relatively wealthy and many had a college degree. They spoke Mandarin or just Hokkien, not Cantonese. They encouraged their children to assimilate in the American culture and were not attached to the Confucian tradition. Therefore the Chinatowns (mostly Cantonese-speaking and poor) were as alien to them as the white suburbs. Taiwanese immigrants generally brought their whole family with them, and several were single women. Other women came as wives of US soldiers returning home. In fact, women generally outnumbered men among Taiwanese immigrants. That was another major difference with the old Cantonese immigrants.

Taiwan was also learning from US investors. US corporations invested in Taiwan to take advantage of cheap manufacturing labor, and this resulted in a transfer of technical know-how from the USA to Taiwan. Taiwanese businessmen quickly learned the secrets of the trade.

General Instrument Corporation of New Jersey opened the Taiwan Electronics Corporation in 1964, the real beginning of Taiwan's electronic industry. The National Taipei University of Technology and the National Taiwan University had been established by the Japanese (respectively, in 1912 and 1928, under different names), and, unlike in the mainland, were not crippled by the ideologues. The Taiwanese learned quickly from US and Japanese companies and in the mid-1960s started producing television sets, transistor radios and electrical appliances. Taiwan also started producing world-class engineers.

Summarizing, the "Chinese" immigrants of 1965-1980 were a different kind of Chinese immigrant because: 1. they came from Taiwan, not from the mainland; 2. they spoke Mandarin and not Cantonese; 3. they were highly educated (doctors, engineers, etc) rather than unskilled laborers; 4. they moved to suburbia rather than Chinatowns; 5. they were more likely to settle in the Los Angeles area than in the San Francisco Bay Area; 6. there were more women than men; 7. many of them returned to their country.

Taiwan was unique among the non-European countries sending immigrants to the USA because the others were neighbors (like Mexico and Cuba), former US colonies (like the Philippines), theaters of US wars (like Korea and Vietnam, where thousands of cross-nation marriages happened during the occupation periods) and English-speaking (like India, Hong Kong and Singapore). As mentioned, Taiwanese immigrants were also generally wealthier and better educated than most non-European immigrants. Even after the USA recognized communist China as the legitimate government of China, the Taiwan Relations Act enacted in 1979 allocated 20,000 slots of immigration for Taiwanese citizens.

In 2008, half of the 342,000 foreign-born Taiwanese living in the USA lived in California: 83,000 lived in the Los Angeles area and 53,000 in the Bay Area. Seventy per cent had a bachelor degree or higher. About half were employed in finance, computers and medicine. Their contribution to the society and economy of California was significant.