Acquired · TSMC · Overview
TSMC
One-line business model — only make chips for other companies — sustained for forty years.
Major events · 1985–2025
- 1985Founding
Morris Chang recruited by Taiwanese government
After 25 years at TI and being passed over for CEO in 1983, Chang accepts the ITRI invitation. Spends two years studying the chip industry before proposing the foundry model.
Acquired episode TSMC + Morris Chang interview + IEEE Spectrum biography
- 1987Founding
TSMC founded in Hsinchu Science Park (Feb 21, 1987)
Founding ownership split: ~48% Taiwanese government (National Development Fund / Executive Yuan), ~28% Philips ($58M cash + production technology + IP license), ~20% private Taiwanese investors (eight companies), ~4% KMT Central Investment Co. Total paid-in capital figures vary by source — Acquired cites ~$220M seed; backing out Philips's $58M / 27.6% implies total committed capital of ~$210M (some Taiwan-centric sources cite NT$1.3B paid-in ≈ $45M at 1987 rates; the difference is paid-in vs. total committed-with-tech-transfer).
Acquired episode TSMC + Wikipedia TSMC + Chris Miller, Chip War
- 1994IPO
TSMC IPOs on Taiwan Stock Exchange
Public listing. Validates the foundry model commercially. Begins the capital-flywheel that funds increasingly expensive process nodes.
TSMC historical disclosures
- 2007Strategic shift
Open Innovation Platform launches
TSMC begins co-designing IP libraries, EDA tools, and process design kits WITH customers. The fab becomes a co-development partner, not just a manufacturer. Locks in switching costs.
Acquired episode TSMC
- 2014Strategic shift
Apple A8 chip — co-development partnership begins
Apple moves from Samsung to TSMC for the A8. The co-development relationship deepens annually; by the 2020s TSMC is single-source for Apple silicon.
Acquired episode TSMC
- 2018Leadership
Morris Chang retires at 86
Chang steps down as chairman. Mark Liu and CC Wei take over as co-leaders; succession executed cleanly, the foundry-first culture preserved.
Acquired episode TSMC
- 2020Product
5nm node enters volume production
TSMC ships 5nm at scale (Apple A14, Mac M1). Establishes a 1-2 generation lead over Samsung and Intel that compounds through the AI boom.
TSMC disclosures + Acquired episode
- 2022Market
CHIPS Act + geo-political pressure peaks
US passes the CHIPS Act ($52B subsidy for domestic fab construction). Taiwan-China tensions raise concentration risk. TSMC commits to fabs in Arizona, Japan, and Germany.
Acquired episode TSMC
- 2024-04Product
Arizona Fab 21 opens
First high-volume TSMC fab outside Taiwan/China. 4nm production for Apple and others. Politically significant; commercially still small share of capacity.
TSMC press release + Acquired episode
- 2024Product
N3 (3nm) node in volume
Apple A17 Pro, NVIDIA Blackwell, AMD next-gen — all on TSMC N3. The leading-edge monopoly hits its current peak.
TSMC + customer announcements
- 2025-01Acquired covered
Acquired releases Morris Chang founder interview
Chang at 93 gives the full origin story on the Acquired podcast. The pure-play philosophy crystallises in his own words.
https://www.acquired.fm/episodes/tsmc-founder-morris-chang
Origin
Pure-play foundry — manufacture chips for other companies only, never design or compete with them. Customers, not products, are the relationship the company defends.
Morris Chang spent 25 years at Texas Instruments rising to Group VP before being passed over for CEO in 1983. He left and was recruited by the Taiwanese government's Industrial Technology Research Institute (ITRI) in 1985 with the brief: build Taiwan a semiconductor industry. Chang, then 54, proposed a pure-play foundry — a structurally new business model. Backed by ~$220M of seed capital (half from the Taiwanese government, half from Philips), he founded TSMC in 1987. The model was met with skepticism — no major customer would commit at launch. The compounding came from one principle Chang refused to bend: never compete with our customers. 39 years later TSMC manufactures ~92% of the world's most-advanced (≤7nm) chips.
Key facts
Annual revenue (FY2024)
~$90B
Market cap
~$1.0T
Leading-edge share (Acquired claim vs verified)
~92% Taiwan / ~67% TSMC at ≤7nm
Annual capex (FY2024)
~$30B
Single leading-edge fab build cost
$15-20B
Apple's share of TSMC revenue (FY2024)
22% (down from 25% FY2023)
Employees worldwide
~80,000
Episodes · 2 covering this company
Hooks from these episodes
A modern leading-edge fab costs ~$20 billion to build and depreciates over the better part of a decade. The whole semiconductor industry depends on a few of these existing in places they could plausibly be defended.
First time I understood why "fabs" appear in geopolitics articles.