History of Taiwanese Semiconductor/Chip Industry
In this blog post I will briefly explain the history of TSMC and will give the answer of some questions such as; “Would the establishment of such a company would be possible without the involvement of Morris Chang?”, “Did TSMC benefited from knowledge transfer from USA in the early years?”, “What kind of support did they get from the Taiwanese Government and Phillips (company)?” and “What are the current investment plans, export figures, revenues of TSMC?”
History of TSMC
Taiwan Semiconductor Manufacturing Company, also known as TSMC, was established in 1987 by Morris Chang, who is frequently considered to as the founder of Taiwan’s semiconductor industry. Before TSMC was founded, semiconductor businesses designed and produced their own chips. Chang, who served as president of the Industrial Technology Research Institute in Taiwan and worked for Texas Instruments, saw a chance to establish a business that would focus on producing chips for other businesses and allowing these businesses to only concentrate on innovation and design. TSMC had a tiny team which contains engineers and a really limited budget, however this did not stop them and TSMC was be able to quickly established a reputation for the caliber of its output. To create chips with increasingly lower dimensions, TSMC has engaged in a variety of research and development efforts. Ultimately, they were successful in creating a distinctive manufacturing method. Morris Chang’s excellent leadership has helped TSMC grow into the largest semiconductor chip producer in the world, which supply a power to variety of modern items that we use like phones, laptops, refrigerators, and cars. Due to these successes, TSMC was able to catch the eye of businesses like Intel, Apple, Qualcomm, Nvidia, and AMD. As a leading global producer of semiconductor chips which is still utilized in several applications and industries, TSMC continues to play a crucial role.
Would the establishment of such a company would be possible without the involvement of Morris Chang?
Influence of Morris Chang on the founding of TSMC is too great to ignore. Morris Chang who attended Harvard University and Massachusetts Institute of Technology and received his bachelor and master degrees in mechanical engineering from MIT. After graduation, he worked in Texas Instruments and General Instrument Corporation. The experiences he gained in semiconductor industry helped him to establishment of TSMC. Under the leadership of Morris Chang, TSMC was able to grow rapidly and become one of the leading companies in the world. Since the company was founded, Morris Chang has solidified position of TSMC in this industry by making a lot of strategic decisions for this company to be successful. So could such a company have been established without the contributions of Morris Chang? Could someone else like him come out and lead the establishment of such a company? Maybe there would be someone like Morris Chang to establish TSMC, however but it is debatable whether it would be as successful as it is now.
Did TSMC benefited from knowledge transfer from USA in the early years?
It can be thought that companies such as TSMC benefit from large semiconductor companies in the USA through knowledge transfer. In 1976, first entry of Taiwan into the semiconductor industry was made with the acquisition of 7.5 μm process technology from RCA company through technology transfer. To considering the deal with RCA and interaction it can be thought that there might be knowledge transfer from USA. Especially considering that Morris Chang, the founder of TSMC, served as senior vice president of semiconductor business at Texas Instruments, it can be assumed that Chang learned a lot about the semiconductor industry from this company in the process. It can also be thought that he used the research results he made in this process for the establishment and operation of TSMC in order to transform it into economic gain for Taiwan’s semiconductor industry. It might be thought that a company like TSMC has benefited from companies in the USA through knowledge transfer, but this knowledge transfer alone would not have been sufficient to ensure the success of this company without the incentives provided by the Taiwanese government. Success of TSMC is the result of knowledge transfer from the USA, innovative ideas generated by TSMC itself, Taiwan’s infrastructure, workforce and incentives provided by the Taiwanese government.
What kind of support did they get from the Taiwanese Government and Phillips (company)?
In 1987, TSMC has left from ITRI using capital from the government, Philips Inc. and private investors. Morris Chang created world’s first foundry with 220 million dollars investment from the Taiwanese government and Phillips. The Taiwanese government also supplied support such as; tax incentives, low-interest loans and etc. The investment of government in infrastructure, such as transportation and telecommunications, also helped to create a favorable environment for the growth of the semiconductor industry in Taiwan. Beside of the investments of Taiwanese government, Morris Chang tried to get investment from Phillips. Morris Chang knew Phillips before he went to Taiwan and Phillips had knew track record of Morris Chang so Phillips has listened his foundry pitch however they were not sure about that if his idea would work. However they were willing to put some money to just let him to work on this idea and did some investment on TSMC. Alongside the Taiwanese government and Phillips, Morris Chang also succeeded to got some investments from private investors.
What are the current investment plans, export figures, revenues of TSMC?
TSMC has current investment plans, that contains investing the $100 billion over the next three years to increase capacity in its factories. Moreover its planning to spending between $25 billion and $28 billion to produce and develop advanced chips, and planning to build its own $12 billion factory in Arizona in May. TSMC is also building a new production facility or “fab” in southern Taiwan that is 22 football fields in size and plans to produce revolutionary 3nm chips that are expected to consume much less power and be up to 15% faster. Additionally, shares of TSMC have seen a roughly 2% increase in morning trading, and the company is currently valued at $550 billion.
In conclusion, even though TSMC started from the bottom and looked like there was no hope them to be this successful they achieved everything they had with great leadership and accurate policies.
https://www.reuters.com/article/us-tsmc-investment-plan-idUSKBN2BO3ZJ
