SEOUL, February 26 (AJP) - At a distinguished industry event in late 2023, Jensen Huang, the founder and chief executive of Nvidia, took the stage to acknowledge a partnership he deemed indispensable to his company’s success.
“Nvidia would not be possible without TSMC,” Huang said, turning toward his longtime collaborator.
Huang praised Taiwan Semiconductor Manufacturing Company (TSMC) and its founder, Morris Chang, for engineering what he called “three true miracles.”
He credited the company with developing custom chips for thousands of clients, mastering the art of mass production while maintaining small-scale customization, and advancing semiconductor technology at a breathtaking pace.
Founded in 1987 by Chang as the world’s first dedicated semiconductor foundry, TSMC has since become a linchpin of the global technology supply chain.
Unlike many semiconductor companies that design and manufacture their own chips, TSMC has built its business on a singular focus: fabrication. By abstaining from chip design, the company positioned itself as a neutral partner for firms seeking manufacturing expertise without the risk of competition.
That strategy has propelled TSMC to the pinnacle of the foundry sector. In 2024, the company commanded 62 percent of global market revenue, dwarfing its closest competitor, Samsung Electronics, which held just 10 percent.
TSMC’s clients include some of the world’s most influential technology firms, from Nvidia to Apple, all of whom depend on the company’s sophisticated manufacturing processes to remain at the forefront of artificial intelligence and computing.
Chang, a Harvard graduate with a storied career at Texas Instruments and General Instruments, championed the then-unorthodox model of contract manufacturing at a time when semiconductor companies traditionally maintained their own fabrication plants. His vision, initially met with skepticism, ultimately proved prescient.
Despite Taiwan’s early financial constraints, the island’s government provided crucial support for TSMC’s launch. The Dutch electronics firm Philips also stepped in with investment, helping the nascent company establish its footing. TSMC gained considerable momentum in the 2010s through its partnership with Apple, investing $9 billion to accommodate the tech giant’s demands.
Under Chang’s leadership, the company cemented its role as the preferred chipmaker for industry leaders including AMD, Nvidia, and Qualcomm. He stepped down as chairman in 2018, passing the reins to C.C. Wei, who now serves as both chairman and chief executive.
Reflecting on TSMC’s journey in an April 2021 speech, Chang remarked, “The advantage was having no competitors; the challenge was having no customers either.” He noted that the company’s fiercest competition does not come from China, but rather from South Korea’s Samsung.
As the global artificial intelligence boom fuels unprecedented demand for high-performance chips, TSMC has reaped the benefits. The company reported a 34 percent increase in revenue in 2024, reaching 2.9 trillion New Taiwan dollars ($88 billion).
Fourth-quarter revenue surged 38.8 percent to 868.46 billion New Taiwan dollars, surpassing analysts’ expectations. Net profit for the final quarter rose 57 percent.
To sustain its dominance, TSMC has earmarked $6.3 billion this year for investment in advanced packaging technologies critical to chip performance and reliability.
Among these initiatives is the development of co-packaged optics, an emerging innovation that integrates optical and electrical components to significantly accelerate data transmission beyond conventional copper connections.
TSMC has also expanded its global footprint, committing to the construction of three manufacturing facilities in the United States, two in Japan, and one in Germany. Japan has pledged over 1.04 trillion yen in subsidies to support TSMC’s operations in Kumamoto as part of a broader national effort to revitalize its domestic semiconductor industry.
While Taiwan’s government stated on Feb. 25 that it had not yet received formal applications for overseas investment, reports suggest that a partnership between TSMC and Intel had been proposed during the Trump administration. Under President Biden, the company secured funding for a manufacturing plant in Arizona — part of a $250 billion investment package, the largest foreign direct investment in U.S. history.
As detailed in Chip War: The Fight for the World’s Most Critical Technology, TSMC has emerged as a key player in the ongoing geopolitical contest between the United States and China. In Taiwan, the company is often referred to as “Guardian Spirit Mountain,” a reflection of its crucial role in the island’s economy and national security.
With artificial intelligence driving the next wave of technological advancement, TSMC remains at the forefront, enabling the world’s leading chip designers to bring their most ambitious innovations to life.
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