From Vision to Innovation: The TSMC Story
Going through the photos from my trip to Taiwan, I realized that I had the most from one location, where I barely spent half a day. I’m referring to the Taiwan Semiconductor Manufacturing Company (TSMC) in Hsinchu.
For those who are not aware, and you must really be living under a rock if you are not, TSMC is the world’s leading semiconductor foundry in the world. It offers the most advanced semiconductor manufacturing technology, i.e., 3nm FinFET process which offers the best power performance by packing transistors more densely on a chip. This makes it ideal for high performance computation on the latest electronic devices such as smartphones, servers, and connected automobiles. TSMC has consistently led the world in improving its manufacturing process, year on year, ensuring the steady march of technology forward. It has done this on the back of a capable in-house R&D organization of more than 8500 scientists and engineers, and funding of USD 5.47 billion in 2022 alone. And this investment has only grown every year since its inception in 1987, resulting in 56,693 patents as of 2022. For its customers, some of the world’s leading design-focused or fabless semiconductor companies, it has meant market leadership in varied segments such as cellular baseband, Wi-Fi access points, hard disk drives, graphics cards and digital TVs.
I had the privilege of visiting the TSMC Museum of Innovation (MOI) located in the Hsinchu Science Park, next to Fab 12A (Morris Chang Building). It’s not a large museum and comprises only 3 galleries with various exhibits celebrating semiconductor technology. Gallery I or the World of Innovation delves into the applications brought forth by semiconductors or chips. From the earliest mobile phones, to drones, XR devices, and much more, it showcases the improvements and pervasiveness of semiconductor technologies due to continued miniaturization aided by TSMC. The second gallery (Unleashing Innovation) focuses on TSMC’s beginnings and its unique business model with constant emphasis on the fact that it has no conflict of interest with its customers. It strives only to enable them to manufacture millions of chips each year. There is also a video wall which explains the working of a semiconductor fab with videos and photos from TSMC’s own highly automated facilities. The final gallery documents the life and motivations of Dr. Morris Chang, the talismanic founder of TSMC. It was his vision and experience in the semiconductor industry in the United States which enabled him to create TSMC.
Also, on display are two original proposal documents which Dr. Chang presented to the Taiwanese government in 1985, and investors in 1986, outlining the strategic and business opportunity in the semiconductor industry for Taiwan. They clearly show the deep insight Dr. Chang had into the industry, his clear-eyed view of the future if Taiwan did not invest in semiconductor technology. More importantly, it unambiguously identified creation of a foundry service company capable of servicing the needs of many international firms creating different specialized chips. It also envisioned the long-term development of Taiwan’s semiconductor industry especially design firms by effective coordination between TSMC and the government research laboratories. The brevity of the two documents totaling less than twenty pages, is astonishing and so is TSMC’s founding mission, “… to be the trusted technology and capacity provider of the global logic IC industry for years to come.” A classic example of Professor Richard Rumelt’s Good Strategy framework; Dr. Morris Chang diagnosed a problem (lack of competitiveness in Taiwan’s semiconductor industry, and increasing gap with US and Japan), established a guiding policy (to create a generalized foundry service company which could take a lead in global manufacturing), and coherent actions (technology transfer from Philips, hiring of expat Chinese engineers, coordination with research institutes, long term investment with focus on technological edge). This has resulted in TSMC becoming a key cog of the semiconductor industry today, with a market cap of more than four hundred billion dollars.
The MOI might be a small museum dedicated to a behemoth corporation. But it leaves a lasting impact. Sitting later at the International Kite Arena, enjoying some fruit tea and pizza, I wondered what could have been if India’s own Semiconductor Laboratory (SCL) formerly Semiconductor Complex Limited, which started production in 1984, had evolved like TSMC. Would we then be at the forefront of creating the future and not trying to catch up?
