Taiwan Semiconductor Manufacturing Company

Morris Chang founded TSMC in 1987 at age 55, after being passed over for the top job at Texas Instruments. His idea was radical: a semiconductor company that only manufactured chips designed by other companies, never competing with its own customers. Every chip company at the time designed and manufactured its own products. Chang's "pure-play foundry" model was considered bizarre. It became the foundation of the entire modern technology industry.

TSMC's model enabled an entirely new category of company: the "fabless" semiconductor firm — companies that design chips but own no factories. Qualcomm, NVIDIA, AMD, Apple, and eventually hundreds of other companies became fabless, outsourcing all manufacturing to TSMC. Without TSMC's foundry model, none of these companies could have existed in their current form. The iPhone's chip, for instance, was designed by Apple in California and manufactured by TSMC in Taiwan.

When the U.S. government placed export restrictions on Huawei in 2020, TSMC was forced to stop manufacturing chips for China's largest technology company. The episode revealed that TSMC — a single company on a single island — manufactured the vast majority of the world's most advanced chips. Governments around the world began emergency programmes to build domestic semiconductor capacity. The U.S. passed the CHIPS Act, committing $52 billion to domestic chip manufacturing.

Russia's invasion of Ukraine in 2022 intensified global concern about Taiwan's security. Analysts began calculating what a Chinese military action against Taiwan would mean for the global chip supply. The conclusion was stark: a disruption to TSMC's operations would halt production of smartphones, cars, medical devices, and military equipment worldwide within months. TSMC had become, in the words of one analyst, "the silicon shield" — Taiwan's most valuable strategic asset.

TSMC began constructing chip fabrication plants in Arizona in 2021, backed by U.S. government subsidies. The project ran years behind schedule and billions over budget, partly due to cultural clashes between TSMC's Taiwanese engineers and American construction and labour practices. TSMC executives privately told investors that replicating Taiwan's manufacturing ecosystem in America was far more difficult than anyone in Washington had anticipated.