TSMC

Taiwan Semiconductor Manufacturing Company Limited(TSMCorTaiwan Semiconductor)is a Taiwanese multinationalsemiconductorcontract manufacturing and design company. It is the world's most valuable semiconductor company,the world's largestdedicatedindependent ("pure-play")semiconductor foundry,and Taiwan's largest company,with headquarters and main operations located in theHsinchu Science ParkinHsinchu, Taiwan. Although the central government of Taiwan is the largest individual shareholder,the majority of TSMC is owned by foreign investors.In 2023, the company was ranked 44th in theForbes Global 2000.Taiwan's exports of integrated circuits amounted to $184 billion in 2022, accounted for nearly 25 percent of Taiwan's GDP. TSMC constitutes about 30 percent of theTaiwan Stock Exchange's main index.
TSMC was founded in Taiwan in 1987 byMorris Changas the world's first dedicated semiconductor foundry. It has long been the leading company in its field.When Chang retired in 2018, after 31 years of TSMC leadership, Mark Liu became chairman and C. C. Wei became Chief Executive.It has been listed on theTaiwan Stock Exchangesince 1993; in 1997 it became the first Taiwanese company to be listed on theNew York Stock Exchange. Since 1994, TSMC has had acompound annual growth rate(CAGR) of 17.4% in revenue and a CAGR of 16.1% in earnings.
Mostfablesssemiconductor companies such asAMD,Apple,ARM,Broadcom,Marvell,MediaTek,Qualcomm, andNvidiaare customers of TSMC, as are emerging companies such asAllwinner Technology,HiSilicon, Spectra7, andUNISOC.Programmable logic devicecompaniesXilinxand previouslyAlteraalso make or made use of TSMC's foundry services.Someintegrated device manufacturersthat have their ownfabrication facilities, such asIntel,NXP,STMicroelectronics, andTexas Instruments, outsource some of their production to TSMC.At least one semiconductor company,LSI, re-sells TSMC wafers through itsASICdesign services and designIPportfolio.
TSMC has a global capacity of about thirteen million 300 mm-equivalent wafers per year as of 2020 and produces chips for customers with process nodes from 2 microns to3 nanometres. TSMC was the first foundry to market7-nanometreand5-nanometre(used by the 2020Apple A14andM1SoCs, the MediaTekDimensity 8100, andAMD Ryzen 7000series processors) production capabilities, and the first to commercializeASML'sextreme ultraviolet (EUV) lithographytechnology in high volume.
In 1986,Li Kwoh-ting, representing theExecutive Yuan, invited Morris Chang to serve as the president of theIndustrial Technology Research Institute(ITRI) and offered him a blank check to build Taiwan's chip industry. At that time, the Taiwanese government wanted to develop its semiconductor industry, but its high investment and high risk nature made it difficult to find investors.Texas InstrumentsandIntelturned down Chang. OnlyPhilipswas willing to sign a joint venture contract with Taiwan to put up $58 million, transfer its production technology, and license intellectual property in exchange for a 27.5 percent stake in TSMC. Alongside generous tax benefits, the Taiwanese government, through the National Development Fund, Executive Yuan, provided another 48 percent of the startup capital for TSMC, and the rest of the capital was raised from several of the island's wealthiest families, who owned firms that specialized in plastics, textiles, and chemicals. These wealthy Taiwanese were directly "asked" by the government to invest. "What generally happened was that one of the ministers in the government would call a businessman in Taiwan," Chang explained, "to get him to invest." From day one, TSMC was not really a private business: it was a project of the Taiwanese state.Its first CEO was James E. Dykes, who left after a year and Morris Chang became the CEO.
Since then, the company has continued to grow, albeit subject to the cycles of demand. In 2011, the company planned to increase research and development expenditures by almost 39% toNT$50 billion to fend off growing competition.The company also planned to expand capacity by 30% in 2011 to meet strong market demand.In May 2014, TSMC's board of directors approved capital appropriations of US$568 million to increase and improve manufacturing capabilities after the company forecast higher than expected demand.In August 2014, TSMC's board of directors approved additional capital appropriations of US$3.05 billion.
In 2011, it was reported that TSMC had begun trial production of theA5SoC andA6SoCs for Apple'siPadandiPhonedevices.According to reports,in May 2014 Apple sourced itsA8andA8XSoCs from TSMC.Apple then sourced theA9SoC with both TSMC and Samsung (to increase volume foriPhone 6Slaunch) and theA9Xexclusively with TSMC, thus resolving the issue of sourcing a chip in two differentmicroarchitecturesizes. As of 2014, Apple was TSMC's most important customer.In October 2014,ARMand TSMC announced a new multi-year agreement for the development of ARM based 10 nmFinFETprocessors.
Over the objection of theTsai Ing-wen administration, in March 2017, TSMC invested US$3 billion inNanjingto develop a manufacturing subsidiary there.
In 2020, TSMC became the first semiconductor company in the world to sign up for theRE100initiative, pledging to use 100%renewable energyby 2050.TSMC accounts for roughly 5% of the energy consumption in Taiwan, even exceeding that of the capital city Taipei. This initiative was thus expected to accelerate the transformation to renewable energy in the country.For 2020, TSMC had a net income of US$17.60 billion on a consolidated revenue of US$45.51 billion, an increase of 57.5% and 31.4% respectively from the 2019 level of US$11.18 billion net income and US$34.63 billion consolidated revenue.Itsmarket capitalizationwas over $550 billion in April 2021. TSMC's revenue in the first quarter of 2020 reached US$10 billion,while its market capitalization was US$254 billion.TSMC's market capitalization reached a value of NT$1.9 trillion (US$63.4 billion) in December 2010.It was ranked 70th in theFT Global 5002013 list of the world's most highly valued companies with a capitalization of US$86.7 billion,while reaching US$110 billion in May 2014.In March 2017, TSMC's market capitalization surpassed that of semiconductor giantIntelfor the first time, hitting NT$5.14 trillion (US$168.4 billion), with Intel's at US$165.7 billion.On 27 June 2020, TSMC briefly became the world's 10th most valuable company, with a market capitalization of US$410 billion.
To mitigate business risks in the event of war between Taiwan and the People's Republic of China, since the beginning of the 2020s, TSMC has expanded its geographic operations, opening new fabs in Japan and the United States, with further plans for expansion into Germany.In July 2020, TSMC confirmed it would halt the shipment of silicon wafers to Chinese telecommunications equipment manufacturerHuaweiand its subsidiaryHiSiliconby 14 September.In November 2020, officials inPhoenix, Arizonain the United States approved TSMC's plan to build a $12 billion chip plant in the city. The decision to locate a plant in the US came after theTrump administrationwarned about the issues concerning the world's electronics made outside of the U.S.In 2021, news reports claimed that the facility might be tripled to roughly a $35 billion investment with six factories.SeeTSMC § Arizonafor more details.
In June 2021, following nearly a year of public controversy surrounding itsCOVID-19 vaccine shortage,with only about 10% of its 23.5 million population vaccinated;Taiwan agreed to allow TSMC andFoxconnto jointly negotiate purchasingCOVID-19 vaccineson its behalf.In July 2021,BioNTech's Chinese sales agentFosun Pharmaannounced that the two technology manufacturers had reached an agreement to purchase 10 millionBioNTech COVID-19 vaccinesfrom Germany.TSMC and Foxconn pledged to each buy five million doses for up to $175 million,for donation to Taiwan's vaccination program.
Due to the2020–2023 global semiconductor shortage, Taiwanese competitorUnited Microelectronicsraised prices approximately 7–9 percent, and prices for TSMC's more mature processors were raised by about 20 percent.In November 2021, TSMC andSonyannounced that TSMC would be establishing a new subsidiary namedJapan Advanced Semiconductor Manufacturing(JASM) inKumamoto, Japan. The subsidiary manufactures 22- and 28-nanometer processes. The initial investment was approximately $7 billion, with Sony investing approximately $500 million for a less than 20% stake. Construction of the fabrication plant started in 2022, with production beginning two years later in 2024.
In February 2022, TSMC, Sony Semiconductor Solutions, andDensoannounced that Denso would take a more than 10% equity stake in JASM with a US$0.35 billion investment, amid a scarcity of chips for automobiles.TSMC will also enhance JASM's capabilities with 12/16 nanometer FinFET process technology in addition to the previously announced 22/28 nanometer process and increase monthly production capacity from 45,000 to 55,000 12-inch wafers.The total capital expenditure for JASM's Kumamoto fab is estimated to be approximately US$8.6 billion.The Japanese government wants JASM to supply essential chips to Japan's electronic device makers and auto companies as trade friction between the United States and China threatens to disruptsupply chains.The fab is expected to directly create about 1,700 high-tech professional jobs.
In July 2022, TSMC announced the company had posted a record profit in the second quarter, with net income up 76.4 percent year-over-year. The company saw steady growth in the automotive and data center sectors with some weakness in the consumer market. Some of thecapital expendituresare projected to be pushed up to 2023.In the third quarter of 2022,Berkshire Hathawaydisclosed purchase of 60 million shares in TSMC, acquiring a $4.1 billion stake, making it one of its largest holdings in a technology company.However, Berkshire sold off 86.2% of its stake by the next quarter citing geopolitical tensions as a factor.In February 2024, TSMCshareshit a record high, with the high on the trading day reachingNT$709 and closing at NT$697 (+8%). This was influenced by the increase in the price target on chip designerNvidia. TSMC currently manufactures3-nanometer chipsand plans to start2-nanometermass production in 2025.It is included in theFTSE4Good Index, being the only Asian company in the top ten.
In October 2024, TSMC informed theUnited States Department of Commerceabout a potential breach ofexport controlsin which one of its most advanced chips was sent to Huawei via another company with ties to the Chinese government.
On 26 August 2019,GlobalFoundriesfiled several patent infringement lawsuits against TSMC in the US and Germany claiming that TSMC's 7 nm, 10 nm, 12 nm, 16 nm, and 28 nm nodes infringed 16 of their patents.GlobalFoundries named twenty defendants.TSMC said that they were confident that the allegations were baseless.On 1 October 2019, TSMC filedpatent infringementlawsuits against GlobalFoundries in the US, Germany and Singapore, claiming that GlobalFoundries' 12 nm, 14 nm, 22 nm, 28 nm and 40 nm nodes infringed 25 of their patents.On 29 October 2019, TSMC and GlobalFoundries announced a resolution to the dispute, agreeing to alife-of-patentscross-licensefor all of their existing semiconductor patents and new patents for the next 10 years.
The key trends for TSMC are (as of the financial year ending December 31):
TSMC and the rest of the foundry industry are exposed to thecyclical industrial dynamicsof the semiconductor industry. TSMC must ensure its production capacity to meet strong customer demand during upturns; however, during downturns, it must contend with excess capacity because of weak demand and the high fixed costs associated with its manufacturing facilities.As a result, the company's financial results tend to fluctuate with a cycle time of a few years. This is more apparent in earnings than revenues because of the general trend of revenue and capacity growth. TSMC's business has generally also been seasonal, with a peak in Q3 and a low in Q1.
In 2014, TSMC was at the forefront of the foundry industry for high-performance, low-power applications,leading major smartphone chip companies, such asQualcomm,Mediatek,andApple,to place an increasing amount of orders.While the competitors in the foundry industry (primarilyGlobalFoundriesandUnited Microelectronics Corporation) have encountered difficulties ramping leading-edge 28 nm capacity,the leadingIntegrated Device Manufacturerssuch asSamsungandIntelthat seek to offer foundry capacity to third parties were also unable to match the requirements for advanced mobile applications.
For most of 2014, TSMC saw a continuing increase in revenues due to increased demand, primarily due to chips for smartphone applications. TSMC raised its financial guidance in March 2014 and posted 'unseasonably strong' first-quarter results.For Q2 2014, revenues came in at NT$183 billion, with 28 nm technology business growing more than 30% from the previous quarter.Lead times for chip orders at TSMC increased due to a tight capacity situation, putting fabless chip companies at risk of not meeting their sales expectations or shipment schedules,and in August 2014 it was reported that TSMC's production capacity for the fourth quarter of 2014 was already almost fully booked, a scenario that had not occurred for many years, which was described as being due to a ripple-effect due to TSMC landing CPU orders from Apple.
However, monthly sales for 2014 peaked in October, decreasing by 10% in November due to cautious inventory adjustment actions taken by some of its customers.TSMC's revenue for 2014 saw growth of 28% over the previous year, while TSMC forecasted that revenue for 2015 would grow by 15 to 20 percent from 2014, thanks to strong demand for its 20 nm process, new 16 nm FinFET process technology as well as continuing demand for 28 nm, and demand for less advanced chip fabrication in its 200mm fabs.
In 2019, TSMC was ranked fourth in theMEMSfield, behind leader Silex Microsystems.In 2021, TSMC was ranked third in theMEMSfield.
Around 56% of TSMC shares are held by the general public and around 38% are held by institutions. The largest shareholders in early 2024 were:
TSMC's N7+ is the first commercially available extreme-ultraviolet lithographic process in the semiconductor industry.It uses ultraviolet patterning and enables more acute circuits to be implemented on the silicon. N7+ offers a 15–20% higher transistor density and 10% reduction in power consumption than previous technology.The N7 achieved the fastest ever volume time to market, faster than 10 nm and 16 nm.The N5 iteration doubles transistor density and improves performance by an additional 15%.
On 300 mm wafers, TSMC has silicon lithography on node sizes:
It also offers "design for manufacturing" (DFM) customer services.In press publications, these processes will often be referenced, for example, for the mobile variant, simply by 7nmFinFETor even more briefly by 7FF. At the beginning of 2019, TSMC was advertising N7+, N7, and N6 as its leading edge technologies.As of June 2020, TSMC is the manufacturer selected for production ofApple's 5 nanometerARMprocessors, as "the company plans to eventually transition the entire Mac lineup to its Arm-based processors, including the priciest desktop computers".In July 2020, TSMC signed a 20-year deal withØrstedto buy the entire production of two offshore wind farms under development off Taiwan's west coast. At the time of its signing, it was the world's largest corporategreen energyorder ever made.In July 2021, both Apple and Intel were reported to be testing their proprietary chip designs with TSMC's 3 nm production.
The investment of US$9.4 billion to build its third 300mm wafer fabrication facility inCentral Taiwan Science Park(Fab 15) was originally announced in 2010.The facility was expected to manufacture over 100,000 wafers a month and generate US$5 billion per year of revenue.TSMC has continued to expand advanced 28 nm manufacturing capacity at Fab 15.On 12 January 2011, TSMC announced the acquisition of land fromPowerchip Semiconductorfor NT$2.9 billion (US$96 million) to build two additional 300mm fabs (Fab 12B) to cope with increasing global demand.
In 2020, TSMC announced a planned fab inPhoenix, Arizona, intended to begin production by 2024 at a rate of 20,000 wafers per month. As of 2020, TSMC announced that it would bring its newest 5 nm process to the Arizona facility, a significant break from its prior practice of limiting US fabs to older technologies. The Arizona plant was estimated to not be fully operational until 2024, when the 5 nm process is projected to be replaced by TSMC's3 nm processas the latest technology.At launch it will be the most advanced fab in the United States.TSMC plans to spend $12 billion on the project over eight years, beginning in 2021.TSMC claimed the plant will create 1,900 full-time jobs.
In December 2022, TSMC announced its plans to triple its investment in the Arizona plants in response to the growing tensions between the US and China and thesupply chain disruptionthat has led tochip shortages.In that same month, TSMC stated that they were running into major cost issues, because the cost of construction of buildings and facilities in the US is four to five times what an identical plant would cost in Taiwan, (due to higher costs of labor, red tape, and training), as well as difficulty finding qualified personnel (for which it has hired US workers and sent them for training in Taiwan for 12–18 months.) These additional production costs will increase the cost of TSMC's chips made in the US to at least 50% more than the cost of chips made in Taiwan.In July 2023 TSMC warned that US talent was insufficient, so Taiwanese workers will need to be brought in for a limited time, and that the chip factory won't be operational until 2025.In September 2023, an analyst said the chips will still need to be sent back to Taiwan for packaging.In January 2024, TSMC chairman Liu again warned that Arizona lacked workers with the specialized skills to hire and that TSMC's second Arizona plant likely won't start volume production of advanced chips until 2027 or 2028.
In April 2024, the US Commerce Department agreed to provide $6.6 billion in direct funding and up to $5 billion in loans to TSMC for the purposes of creating semiconductor manufacturing facilities in Arizona. This action falls under theCHIPS and Science Actand is intended to boost domestic chip production for the USA.
In October 2024 it was revealed that development around the TSMC plants would be called Halo Vista, that will develop 3,500acresof property from restaurants, hotels, housing, and otherMixed-use development.  There will also be a Sonoran Oasis Research and Technology Park that will also help set up the supply chain and foster innovative development, much like howHsinchu Science Parkis to TSMC inTaiwan. As many as 6 fabrication plants could be built there worth a total of around $120 billion.
TSMC Washington is a subsidiary of TSMC based inCamas, Washington, 32 km (20 mi) outsidePortland, Oregon. The 105 ha (260 acres) campus contains a 9.3 ha (23 acres) complex consisting of a 12,000 m(130,000 sq ft) 200mm wafer fabrication plant.TSMC Washington (originally known as WaferTech) was established in June 1996 as a joint venture between TSMC,Altera,Analog Devices, andISSI. The companies along with minor individual investors placed US$1.2 billion into this venture, which was at the time the single largest startup investment in the state of Washington. The facility started production in July 1998 with its first product being a 0.35 micrometer part for Altera.TSMC bought out the stake of the other partners in 2000, turning the company into a fully-owned subsidiary of TSMC.As of 2024, the facility employs 1100 workers and supports node sizes of 0.35, 0.30, 0.25, 0.22, 0.18, and 0.16 micrometers, with an emphasis on embedded flash process technology.
In November 2021, TSMC andSonyannounced that TSMC would be establishing a new subsidiary namedJapan Advanced Semiconductor Manufacturing(JASM) inKumamoto, Japan.DensoandToyotahave also invested in the company and are minor shareholders.
The first factory (Fab 23) inKikuyo, Kumamoto, began commercial operations in December 2024 and produces 12-, 22-, and 28-nanometer processes. Fab 23 cost US$8.6 billion to build, with 476 billion yen subsidised by theMinistry of Economy, Trade and Industry(METI).
The second factory, currently under construction adjacent to Fab 23 as of January 2025, will produce 6-nanometer and 12-nanometer processes. This factory is estimated to cost US$13.9 billion, with 732 billion yen funded by the METI.
In August 2023, TSMC committed €3.5 billion to a €10+ billion factory inDresden, Germany. The plant is subsidised with €5 billion from the German government. Three European companies (Robert Bosch GmbH,Infineon Technologies, andNXP Semiconductors) invested in the plant in return for a 10% share each. The resulting joint venture with TSMC is named European Semiconductor Manufacturing Company (ESMC).The factory is planned to be fully operational in 2029 with a monthly capacity of 40,000 12-inch wafers.