If TSMC sneezes, phone launches, GPU releases, game consoles, cars, and more can all catch cold. It represents a single point of failure for leading-edge chips.

The TSMC story underscores how pivotal manufacturing innovation can be. Given that virtually all cutting-edge computing traces back to TSMC chips, understanding its history, model, and strategic positioning is crucial for anyone tracking technology’s future.

High-Level Summary

1. Morris Chang’s early life and career:
   • Born in 1931 in China, fled multiple wars before moving to the US.
   • Studied at Harvard and MIT, cut his teeth in semiconductor R&D at Sylvania and Texas Instruments (TI), eventually becoming TI’s semiconductor VP.
2. Founding TSMC in Taiwan (1987):
   • Taiwan’s government needed to jumpstart a higher-tech, higher-margin industry.
   • Morris Chang was recruited by Taiwan’s Industrial Technology Research Institute (ITRI) and tasked (almost “forced”) to create a new chip company.
   • He invented the “pure-play foundry” model—manufacturing chips for others while not competing on design.
3. The “real men have fabs” world:
   • In the 1980s, integrated chip makers like Intel, TI, Motorola, etc. owned their own factories (“fabs”). A standalone manufacturing service was widely considered unviable.
   • TSMC’s bet: as chip design got more complex, plenty of talented designers would prefer outsourcing expensive manufacturing to TSMC.
4. How TSMC won over time:
   • The explosion of “fabulous” chip companies (Qualcomm, Broadcom, Nvidia, Apple’s in-house designs) needed an advanced foundry partner.
   • TSMC’s relentless reinvestment in manufacturing technology gave it a widening lead, culminating in extremely advanced 5nm and 3nm processes.
   • Today TSMC has dominant market share, especially in the most cutting-edge semiconductor processes. It’s essential to nearly all smartphones, GPUs, and advanced computing (AI/ML, etc.).
5. Strategic and geopolitical angles:
   • TSMC’s location in Taiwan highlights complex geopolitical risk.
   • The company is diversifying slightly, e.g. building new fabs in Arizona and Japan, but most advanced production still happens in Taiwan.
   • This unique position underpins modern computing yet raises questions about global security of supply.

Approximate Timeline

• 1930s–1940s: Morris Chang grows up in wartorn China, ultimately fleeing to Hong Kong and later the United States.
• 1949–1951: Arrives at Harvard, then transfers to MIT for mechanical engineering.
• Mid-1950s: Works at Sylvania’s semiconductor division, learns electrical engineering nights and weekends.
• 1958: Joins Texas Instruments as the integrated circuit is being invented. Quickly rises through the ranks, notably improving TI’s yields on IBM mainframe chips.
• Late 1960s–1970s: Chang becomes TI’s semiconductor VP but eventually gets rotated to the consumer division. Intel and other competitors surge. Chang leaves TI.
• 1985: Morris Chang is recruited to Taiwan’s ITRI (Industrial Technology Research Institute), aiming to create a higher-margin tech sector.
• 1987: TSMC is founded with half of its initial capital from the Taiwan government, minority investment from Philips. Morris Chang receives no founder equity (only salary), a rarity in Silicon Valley terms.
• Late 1980s–1990s: TSMC initially survives on manufacturing “excess capacity” for large chipmakers, then shifts focus to new “fabulous” chip startups.
• Mid-1990s: TSMC becomes profitable, expands capacity, and starts catching up to leading-edge manufacturing.