History of Taiwanese Semiconductor Chip Industry
TSMC and the Taiwanese Semiconductor Industry Brief Analysis
Please go through the papers I attached below and submit your reflection paper on the history of TSMC(Taiwanese Semiconductor Manufacturing Company).
1- Briefly explain the history of TSMC (200 words)
Taiwan who holds the 30% of the semiconductor industry globally; has a attention-grabbing background turn backs to 1970s. In 1974–9, although all the world was experiencing a recession, Taiwan attempted for the IC chip industry. Government established several institutions such as ERSO (Electronic Industrial Research Center) and ITRI (Industrial Techology Research Center) that plays an important role in manufacturing technology. These industries holds many firsts of the Taiwanese technology manufacturing. Motorola, Philips and Texas some of this companies established during this era. Next decade, by the Hsinchu Science Park the industry accelerated and called as Silicon Valley of East. United Microelectronics Corporation (UMC) was another one came to stage in 1980. Not just this institutions but also some projects launched by government like very-large-scale integration (VLSI) technologies and VLSI Circuit Technology Development Project. Many famous firms, brands and corporations have been revealed at this period. When the 5-year Development Project of Submicron Manufacturing Process Technology was launched in 1990 with a budget of US$280 million Taiwanese industry shifted a new phase. It was comparatively early and they already had the experience that will be enough to manage this new phase so next decad will be the pay off decade for Taiwan for all this investments and effort. By 2000s, we observe establishment of high quality new brands for chip, computer and high tech products.
2- Do you think that establishment of such a company would be possible without the involvement of Morris Chang? (100 words)
Analytically yes and no. Because the government had a initial action making role in this field. This company will be established in any way but maybe we have to talk about the indicators of that company that makes it a giant producer. As Morris Chang said in the interview “Values did not changed but we changed our vision”. So in the same circumstances anybody would establish, especially by governmental support. But what makes this company succeed rapidly and set a model for the world is definitely the vision of Morris Chang. He states; in asian countries entrepreneurship is not new; he inspired from this. Also his ideas about competitiveness, production spirit and quality target differs the acceleration of the success.
3- Do you think that in the early years TSMC benefited from knowledge transfer from USA? (200 words)
First of all when we look at the leaders of that project like Morris Chang and other Taiwanese executives that play a great role for this industry; we clearly see that most of them took their education in Harvard Business School, Stanford, California University etc. which are the center for information for technology. Also atmosphere of U.S. universities provide a vast network of interested investors and people work in same industry for students. They might get familiar with all these early in bachelors degree years and also get their first experiences in their companies and see the dynamics in field. Secondly s,nce they analyised closely the American market and how things go; saved themselves from IP theft and set the ideology that ; “We don’t compete with our costumers” and work trust-based. As a result they established strong business relationships with Apple and many other US companies; supply them the main component of their phones or computers. So that by of 2022 trade volume amid them reached 1.49 NT trillion dollars as biggest costumer of TSMC. By the way there is a great role of American and Australian officials to keep close policies with TSMC against to China in this achievement.
4- What kind of support did they get from the Taiwanese Government and Phillips (company)? (200 words)
Government of Taiwan was the first and main real player initially in this story. Phillips was not that much believin that industry at the beginning. So their investment was kind of limited understandably they were avoiding too much risk to put a lot of money. That’s why lets say first five years government, ITRI and ERSO were in the stage but in 1987 TSMC separated from ITRI they used the capitals provided by government and Phillips (IC packaging in particular). This period is important because especially capitals for wafers were kind of hard to be supplied. As far as I get frm readings government was always the main supporter in managing, creating a public funding and physical manner for TSMC until it became able to walk on its own.
5- What are the current investment plans, export figures, revenues of TSMC? (100 words)
As of the 2022; revenues of TSMC catched the highest level in its history (NT 529 billion dollars). That year also was record of single client contribution to revenue which is as known Apple by NT500 billion dollars. But strangely it was actually 23% of total sales and less than 2021 comparatively (26%). Following Apple, AMD is second biggest client for TSMC and just these two makes 65% of TSMC’s sales of high-quality chips (1.49 NT dollars). After oming the American two giant client TSMC is producing for China contributing 10.82 percent to TSMC revenues at NT245.17 billion dollars which is comparatively so low especially when the total demand and consumption of China is also taken into account.
Moving on to plans for future would be as they expressed; to invest more on R&D to keep tech leadership, conduct new solutions for 3D IC advanced packaging and 3D transistors and many other specific products. As Morris C. emphasised in interview TSMC’s one of major topics that they always paid attention is “integration” due to technology is something used when many components come together. Ther target to increase energy-efficiency and integration. Also they target to shift 5G in 3D intelligent sensors and smart IoT apps .As the long term targes; they plan to produce nanowires and memories by new researches in 8–10 years and establish new cooperations with foreigner R&D buddies and academia to find more cost-effective solutions for SoC techs.
