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TSMC – The World’s First and Most Valued Semiconductor Foundry.

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Taiwan Semiconductor is home to many world-famous technology companies, and several foreign companies have also established their manufacturing units in this small country. Along with that, Taiwan Semiconductor is also known for being the headquarters for the world’s largest dedicated independent (pure-play) semiconductor foundry, i.e. TSMC (Taiwan Semiconductor Manufacturing Company, Limited).

TSMC is a semiconductor contract manufacturing and design company. It designs, manufactures, tests, and ships integrated circuits as well as other semiconductor devices to its worldwide customers. TSMC is one of the largest semiconductor companies in Taiwan, with its chips being used in almost every piece of electronic equipment, from smartphones, laptops, and video game consoles to data centres and F-35 fighter jets.

A Brief Introduction

TSMC is a Taiwanese company with its headquarter located in the Hsinchu Science Park in Hsinchu. The company was founded in 1984 and has most of its shares owned by foreign investors. TSMC mainly deals in the manufacturing of Integrated circuits and related services and serves with the brand names CyberShuttle prototyping service, Open Innovation Platform, and eFoundry online services. WaferTech, TSMC PRC, and SSMC are some of its subsidiaries.

TSMC recorded net annual revenue of NT$1.07 trillion in 2019, with 51,297 employees working for it in its global offices. As per the 2020 records, the company can manufacture 13 million 300 mm equivalent wafers per year. Apple, Huawei, Sony, Qualcomm, Broadcom, and HiSilicon are some famous names that are the permanent clients of TSMC, and the list of clients for the company goes as long as 500 companies from across the world.

The Founding Story of TSMC

The late 70s and the beginning of the 80s was the time when semiconductor technology was emerging at a high pace. In 1985, the Taiwan government appointed Morris Chang, a Taiwanese businessman, having more than 25 years of experience in the field of the semiconductor industry, to help them bring the technology to Taiwan. After establishing the first non-profit research institute ITRI in 1986, the Taiwan government, along with Chang, established the world’s first dedicated semiconductor foundry named TSMC in 1987. TSMC was a joint venture between the Taiwan government with 21% shares, Dutch multinational electronics conglomerate Philips with 28% share, and other private investors owning the rest of the shares in the company.

TSMC
Image Source: openthenews.com

TSMC was founded at the time when companies like Intel, NEC, Fujitsu were already making their chips. But the business idea behind TSMC was to provide the other companies with the chips manufacturing service, saving lots of time and money for them. This idea attracted many customers for TSMC, not only from Taiwan but also the big-name companies from Silicon Valley.

When TSMC had just started its journey, IDMs was ruling the industry. But just in ten years in the business, TSMC was at the level of IDMs. In 1997, the company got listed on the New York Stock Exchange, becoming the first Taiwanese company to do so. The years 2000 onwards have been the year of pure growth for the company, and it added clients like AMD, Apple Inc., Broadcom Inc., Marvell, MediaTek, Nvidia, Qualcomm, Xilinx, NXP, STMicroelectronics and Texas Instruments to its customer list.

By the year 2011, TSMC had increased its research works by 39%. The same year the company also started the trial production of A5 SoC and A6 SoCs for Apple’s iPad and iPhone devices. In 2013, it was among the 100 most valued companies in the world on the FT Global 500 list. In 2014, TSMC was producing A8 and A8X SoCs for Apple, and it became the exclusive producer of A9X. The company surpassed the market capitalization of Intel in 2017 and became the world’s 10th most valuable company in 2020.

Morris Chang, The Founder TSMC

Morris Chang is known as one of the famous businessmen and the founder of TSMC. He was born in Ningbo, Chekiang, on 10 July 1931 and was brought up in British Hong Kong due to the Second Sino-Japanese War. In 1951, he went to the Massachusetts Institute of Technology and obtained a graduate and postgraduate degree in mechanical engineering.

TSMC Founder
Image Source: forbes.com

After completing his education, he joined Sylvania Electric Products, and after working for three years at the company, he joined Texas Instruments in 1958. The latter sponsored Chang’s doctorate, and he joined Stanford University in 1964 to complete a PhD in electrical engineering. Chang spent 25 years of his career at Texas Instruments and was leading the company as the group vice president of its worldwide semiconductor business in the later years. After leaving TI in 1984, he also worked as the COO and president of General Instrument Corporation for one year.

The Taiwanese government wanted to work in the field of semiconductor, so it called back Chang to Taiwan and appointed him as the chairman and president of the newly established Industrial Technology Research Institute in 1985. Under his leadership, TSMC has become the largest semiconductor foundry in the world. During his time at TSMC, he served the company at various ranks, including the chairman and the CEO of TSMC. He retired as the CEO on 5 June 2018 from TSMC.

Morris Chang: The Father of Taiwan’s Chip Industry

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China is known as the major manufacturer of electronics all over the globe. The reason is simple, it is blessed with leaders, who have worked hard to be ahead of everyone else and took the sole responsibility, to make their company as well as China, the leader of electronics manufacturers. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s first and biggest silicon foundry. The company became what it is today only because of the leader who served it for 30 years – Morris Chang.

Early Life

Born on 10th July 1931, in Ningbo, Chekiang, China, Morris Chang is the founder, former chairman and CEO of Taiwan Semiconductor Manufacturing Company. His father was an official in the Yin county government. Chang’s life’s ambition was to become a novelist or a journalist. But his father persuaded him to take up something else.

In 1948, Chang moved to Hong Kong at the age of 17, as it was the peak time of the Chinese Civil War. Just the next year the People’s Republic of China was established. In 1949, Chang moved to the United States to study at Harvard University. Later on, he transferred to Massachusetts Institute of Technology, where he completed his bachelors and master’s degree in mechanical engineering.

Career

In 1955, just after graduating, Chang landed his first job in the industry in Sylvania Semiconductor in the United States. After working for three years, in Sylvania Semiconductor he moved to Texas Instruments, in 1958. Chang spent the next 25 years of his life in this company. While working at TI, he learned everything about semiconductors and made advancements in it. He referred to these years as ‘youth of semiconductors’.

Morris Chang
Image Source: wikimedia.org

After his continuous hard work, Chang received a promotion in TI. He became the manager of the engineering section in 1961, i.e. just after three years of his joining the job at TI. Looking at his potential, Texas Instruments decided to invest a bit more in Chang and gave him the opportunity to obtain his PhD. He went to Stanford University and received his PhD in electrical engineering in 1964. He finally rose up to the rank of Vice President and took the responsibility of TI’s worldwide semiconductor business. During his time at TI, Chang worked on the four-transistor project, for which, IBM was handling the manufacturing unit. He also brought forward the idea of pricing semiconductors at low costs to gain larger profits in the long term.

Chang left Texas Instruments in 1983, and later, became the president and chief operating officer of General Instrument Corporation, from 1984-85. He left GIC and got a proposal from the government of the Republic of China for the post of chairman and president of Industrial Technology Research Institute. He accepted the proposal and set out to change the whole course of science and technology development in Taiwan.

Morris Chang was responsible to promote industrial and technological development in Taiwan. He used his decades of experience and founded TSMC, in 1987. This was the time when big companies considered outsourcing the manufacturing capabilities to Asia. Chang’s visionary aim became successful, as TSMC became the leading semiconductor foundry. It acquires 50% of the total global market share. Its major customers include Apple, Qualcomm, Nvidia, and Intel. TSMC became the profitable and biggest chip makers in the world.

Chang’s vision was clear and, that was not to pivot the direction of the company. It will always be a pure play foundry and will never compete with its customers. Chang retired from ITRI, in 1994 and took the position of chairman at Vanguard International Semiconductor Corporation the same year till 2003. He continued to serve as the chairman of TSMC. In 2005, Chang handed the CEO position to Rick Tsai, but, returned back again in June 2009.

Morris Chang announced his retirement from the company on June 5, 2018, but had already planned the future of the company. The new CEO of the company would be C.C.Wei and the chairman position would be filled in by Mark Liu.

Personal Life

Chang won many accolades due to his leadership quality and achieving great heights of success. Forbes magazine named Morris Chang as one of the most visionary leaders in the world. After retiring from his service, which took the electronics industry to next level, Chang wants to spend time with his family. He lives with his wife Sophie Chang and three children.