Taiwanese Semiconductor Manufacturing Company
In this medium post, I will go through some questions and answers for better understanding the success of the Taiwanese semiconductor manufacturing.
— The first, let’s briefly explain the history of TSMC(Taiwanese Semiconductor Manufacturing Company).
In 1985, Taiwan was behind in the semiconductor industry, lagging two generations behind leading global companies. Morris Chang, a veteran of the semiconductor industry, was appointed president of the Industrial Technology Research Institute (ITRI) and was tasked with drafting a plan to start a new semiconductor company in Taiwan. Chang proposed the pure-play foundry model, which would be an IC manufacturer with no products of its own, whose fabs would only produce customer designs. This would play to Taiwan’s strength in manufacturing. The Taiwan government agreed to provide 48% of the capital, and after a year of pitching to domestic and international companies, the world’s first dedicated IC foundry, Taiwan Semiconductor Manufacturing Company (TSMC), was founded on February 21, 1987, with a paid-in capital of NT$1.378 billion (approximately US$35 million). The company started small but was built from the beginning to be a modern, global company with international management and investors.
— Establishment of such a company would be possible without the involvement of Morris Chang? Let’s try to answer this question.
No, it is unlikely that the establishment of TSMC would have been possible without the involvement of Morris Chang. Chang was the founder, as well as the former chairman and CEO of TSMC. He had extensive experience in the semiconductor industry, having worked for several companies before starting TSMC. Additionally, he was recruited by the Taiwanese government to promote industrial and technological development in Taiwan, which led to the establishment of TSMC. Therefore, it is reasonable to conclude that Morris Chang played a crucial role in the establishment and success of TSMC.
— In the early years TSMC benefited from knowledge transfer from USA?
(My answer for this question is a little long but please be patient:))
During its early years, Taiwan Semiconductor Manufacturing Company (TSMC) was able to take advantage of knowledge transfer from the United States. The government of Taiwan recognized the potential of the electronics industry and established research centers, such as the Electronics Industrial Research Centre (which was later renamed to the Electronics Research and Service Organization (ERSO)) of the Industrial Technology Research Institute (ITRI). These centers were established with the goal of developing and attracting electronic engineering talent. To further enhance their efforts, ITRI-ERSO entered into a contract with the Radio Corporation of America (RCA) to obtain semiconductor technologies. Within a month of the contract being signed, personnel from ITRI-ERSO were sent to RCA for training, providing valuable knowledge transfer and expertise. The government of Taiwan also established the Hsinchu Science Park in 1980, which quickly became known as the Silicon Valley of the East. In addition, they created United Microelectronics Corporation (UMC) as a corporate spin-off of ERSO that same year. Finally, TSMC was spun off from ITRI with the help of capital from the government, private investors, and Philips Inc in 1987. All of these efforts helped pave the way for the success of Taiwan’s semiconductor industry
— What kind of support did they get from the Taiwanese Government and Phillips (company)?
a. Taiwan’s semiconductor industry is successful due to government investment in research, development, and talent cultivation since 1974.The foundations for development (1974–1979). 4
b. In 1980, Taiwan established the Hsinchu Science Park, known as the Silicon Valley of the East, and created the United Microelectronics Corporation with government and investor funding to start semiconductor manufacturing in Taiwan.
c. TSMC was created in 1987 with government, private, and Philips Inc. funding. TSMC’s foundry services allowed IC design houses to avoid expensive manufacturing costs and boosted growth in the global IC design industry.
d. In the 1970s, Taiwan created the Electronics Industrial Research Centre to develop electronic engineering talent to address the lack of semiconductor technology for its electronics industry.
— What are the current investment plans, export figures, revenues of TSMC?
TSMC, or Taiwan Semiconductor Manufacturing Company, is one of the world’s largest foundries and a major player in the semiconductor industry. TSMC had several current investment plans, high export figures, and impressive revenues.
Investment plans: In April 2021, TSMC announced plans to invest $100 billion over the next three years to expand capacity and improve technology. This investment is expected to help meet the growing demand for semiconductors across various industries, including automotive and consumer electronics. TSMC, a prominent semiconductor manufacturer, has released a corporate social responsibility report indicating that it contributed over 4% of Taiwan’s GDP in 2019. The company’s investments created approximately US$25.24 billion in added value, representing a 4.85% increase from the previous year and accounting for 4.46% of Taiwan’s GDP. TSMC’s latest financial reports show that its current revenue (TTM) is US$75.01 billion, and it generated a revenue of US$56.84 billion in 2021, an 5 increase over the US$46.12 billion revenue generated in 2020. With over 50,000 employees in Taiwan alone, TSMC is a significant employer in the region. Overall, TSMC’s investment plans, export figures, and revenues demonstrate the company’s strong position in the semiconductor industry and its ability to adapt to changing market demands.
Resources
https://companiesmarketcap.com/tsmc/revenue/ https://www.taipeitimes.com/News/biz/archives/2019/08/31/2003721420
