The Rise of Taiwan Semiconductor Manufacturing Co. (TSMC) and its Founding Visionary
In the intricate landscape of Taiwan’s semiconductor industry, where companies often remain hidden from the public eye, there emerges a global beacon of innovation and influence: Taiwan Semiconductor Manufacturing Co. (TSMC). Founded in 1987 by Morris Chang, TSMC has secured its position as the second most valuable semiconductor company worldwide, trailing only behind Nvidia. Yet, despite this international prominence, Chang’s name recognition remained modest until recent times.
Exploring the Semiconductor Galaxy and Its Role in Modern Life
Amidst this realm of lesser-known founders, semiconductor chips shine as one of the world’s most traded commodities. In fact, they hold the fourth position in global trade, trailing only crude oil, motor vehicles and parts, and refined petroleum. These tiny chips, ubiquitous in modern life, are the unheralded powerhouses driving industries forward. From the airbags that enhance car safety to the intricate engines powering vehicles, an average car boasts a staggering 1,400 semiconductors.
Taiwan’s Semiconductor Industry: A Global Force with Local Roots
Taiwan’s semiconductor industry thrives with a local workforce of 600,000 individuals, contributing significantly to the island’s economy. Holding an 18% share of the global market, Taiwan stands second only to the U.S., which boasts a 39% share. In terms of revenue, the industry generated a substantial $170 billion in 2022. To put this into perspective, the U.S. brought in $378 billion during the same period, as reported by the Taipei-based Market Intelligence & Consulting Institute.
Beyond the Giants: Nurturing Small and Medium-sized Enterprises
Despite its global stature, Taiwan’s semiconductor industry primarily consists of a coalition of small and medium-sized enterprises. Brady Wang, a former TSMC engineer and current associate director at Counterpoint, a technology research firm, emphasizes the industry’s landscape of smaller players in comparison to international peers. Among the multitude, only the top five companies surpass NT$100 billion ($3.1 billion) in revenue, as highlighted by data from the Industrial Technology Research Institute (ITRI) for the year 2021.
Top Players: From Visionaries to Industry Pioneers
In the echelons of Taiwan’s semiconductor landscape, only the most visionary founders find themselves on the Forbes billionaire ranks. These names include TSMC’s Chang, Tsai Ming-Kai of MediaTek, and the Chang brothers of ASE. TSMC’s Chang, while not the wealthiest in terms of net worth, wields substantial influence both politically and industry-wide, further solidifying his role as a prominent figure.
The Genesis of Taiwan’s Semiconductor Journey
Taiwan’s journey into the semiconductor realm was catalyzed by economist Li Kwoh-ting, known as K. T. Li. In the 1980s, while Taiwan was under martial law, Li played a pivotal role in inviting Morris Chang back to the island from the U.S., where Chang had already achieved success. With a free hand provided by Li, Chang revolutionized the semiconductor landscape by establishing the concept of contract chip-making, or foundry, which transformed Taiwan into a hub of technological innovation.
The Uphill Climb and Unseen Rewards
Investing in the semiconductor industry requires a long-term view and a willingness to embrace constant technological innovation. However, the rewards can be substantial. TSMC’s continuous investment has propelled it to the forefront of technology, holding a remarkable 90% grip on the world’s advanced chips, which are etched down to 5-nanometer or even smaller scales. This dominance solidifies TSMC’s pricing power, making it difficult for competitors to catch up.
A Symphony of Vision and Returns
In this dynamic landscape, Taiwanese tycoons who hopped on the tech bandwagon early have reaped remarkable rewards. Despite their ventures often being lesser-known, they provide significant returns. These visionaries foresaw the electronics surge and accurately predicted the rise of the semiconductor industry.
As the story of Taiwan’s semiconductor industry unfolds, it becomes clear that its progress is fueled by a combination of visionary leaders, relentless innovation, and a commitment to remain at the forefront of global technology.
