TSMC Founded, Inventing the Semiconductor Foundry Model
Before 1987, semiconductor companies were almost universally integrated device manufacturers (IDMs): firms like Intel and Texas Instruments designed their own chips and manufactured them in their own fabrication plants, and any company wanting custom chips made had to convince an IDM to spare capacity from its own product lines -- an inherently conflicted arrangement, since a chip designer's biggest potential customers were often also its most direct competitors. Morris Chang, a Texas Instruments veteran who had risen to the highest levels of an American semiconductor firm despite widespread doubts that a non-American could lead US technology companies, returned to Taiwan and, with government backing, founded TSMC on the opposite premise: a foundry with no chip designs of its own, existing purely to manufacture designs submitted by 'fabless' customer companies. This removed the competitive conflict of interest entirely and allowed any chip designer, however small, to access world-class manufacturing without building a multi-billion-dollar fab of their own. The foundry model TSMC pioneered enabled an entire generation of fabless chip design companies -- including, decades later, Nvidia, Qualcomm, AMD, and Apple's in-house silicon designs -- to compete purely on design innovation while TSMC absorbed the escalating capital cost of leading-edge fabrication, a cost that would eventually reach tens of billions of dollars per advanced fab.
- Year: 1987 CE
- Category: Economic
