History of Taiwanese Semiconductor/Chip Industry
A brief explanation of history of TSMC would be; Morris Chang founded TSMC in 1987 with 150 employees, making it Taiwan’s first semiconductor manufacturer. TSMC began operations with three core values: integrity, commitment, and innovation. As Morris Chang referenced in his interview with Jen-Hsun Huang, they have gone through the many crucial stage, beginning with survival. According to Mr. Chang, it was difficult at first to persuade shareholders and staff members that this business would succeed. After their upfront investment of $220 million dollars from the federal govt, Phillips, and other investors, they took the company public for the first time in 1994, with a market cap of $4 billion dollars. After only three years, the company went public on the New York Stock Exchange in 1997, with a market capitalization of $6 billion. Chang stated that the 1990s were the most important years for the company because they were a time of rapid expansion. TSMC grew at a rate of 50% per year during the 1990s. According to Mr. Chang, the company reached adulthood in the 2000s. Their rate of increase had slowed compared to the 1990s, but the company had become the world’s second most valuable semiconductor fab. TSMC has also become Taiwan’s most valuable company. TSMC now has an earning of $10 billion USD and a market capitalization of $60 billion USD.
“Do we think that establishment of such a company would be possible without the involvement of Morris Chang?”
Morris Chang has been instrumental in the establishment and growth of TSMC. His own presence as a former operating executive at Texas Instruments, the largest semiconductor company at the time, persuaded many stockholders and employees. As a result, his significance is undeniable in the sense that he founded the first semiconductor business in Taiwan, as he stated, which was unique in its kind. That is precisely why I believe TSMC would not exist if Morris Chang had not been engaged. He had the experience to run such a business, he knew what he was doing, and he was the most convincing person to lead a semiconductor company in Taiwan and gain government backing.
“Do wethink that in the early years TSMC benefited from knowledge transfer from USA?”
Morris Chang, the founder of TSMC, attributes the industry’s achievements to his time in the United States. As an operating executive in semiconductor production at Texas Instruments, he oversaw 3000 employees. As he explains in his press conference, he was nominated as the most credible candidate to found a semiconductor company in Taiwan. He had previous experience with TSMC’s US counterparts, so he knew what to do and what not to do, and he applied all of his expertise to his business. As a result, I believe that his experiences in the United States were crucial in determining the founding dates of TSMC
“What kind of support did they get from the Taiwanese Government and Phillips (company)?”
The most significant assistance provided by the Taiwanese government and Phillips during the 1980s was a $220 million US dollar loan to establish TSMC. During that time, the government provided 43% of the funds, with Phillips receiving 7%. According to my understanding, Phillips only provided economic help; however, the Taiwanese government also encouraged investors to invest in TSMC. As Morris Chang stated, it was challenging to raise such a big amount of cash in Taiwan at the time, and some investors must have been persuaded to invest in this business. That is where the government had stepped in. The Taiwanese government had able to persuade investors that it was a government policy to establish a semiconducting company, and they hoped anyone to support that policy.
“What are the current investment plans, export figures, revenues of TSMC?”
Presently, TSMC has an overall income of around 10 billion US dollars and a market cap of 60 billion USD, as Jen-Hsun Huang mentioned in his interview with TSMC’s founder Morris Chang. They have capital investment in mind for operating new furnaces with new and innovative solutions as they grow 15 to 20% per year, and they are also committed to supplying their products to their valuable customers during the global chip shortage of the 2020s. They plan on investing $100 billion in manufacturing to accomplish this. They also intend to establish new manufacturing facilities in the United States in order to increase their market share in semiconductor production.
