Taiwan Semiconductor Manufacturing Company Limited (TSMC) Case Study

    About Company

    TSMC (Taiwan Semiconductor Manufacturing Company Limited; also known as Taiwan Semiconductor) is a Taiwan-based transnational semiconductor contract-making and blueprint company.

    TSMC is the worthiest semiconductor firm in the world, the world’s biggest out-and-out (“pure-play”) self-regulating semiconductor factory, and one of the biggest corporations in Taiwan.

    TSMC has its main office and principal operational hub situated in the Hsinchu Science Park, Hsinchu.

    Overseas investors are the majority stakeholders of TSMC, and the central government of Taiwan is the biggest stakeholder.

    In 1987, Morris Chang established Taiwan Semiconductor Manufacturing Company Limited in Taiwan. TSMC was the oldest devoted semiconductor factory in the world and it has been the top performer in its domain for a long time.

    After Morris’s departure in 2018, following three decades of TSMC headship, CC Wei became the Chief Executive Officer and Mark Liu the Chairman. Since 1993, TSMC has had a listing on the TWSE (Taiwan Stock Exchange) with the ticker sign 2330. It was the oldest Taiwan-based firm to be registered on the New York Stock Exchange (ticker symbol TSM) in 1997.

    Since 1994, the CAGR (compound annual growth rate) of Taiwan Semiconductor Manufacturing Company has been 16.1% in the case of income and 17.4% in the case of revenue.

    The majority of the top fabless semiconductor firms like Apple, AMD, Broadcom, ARM, MediaTek, Marvell, Nvidia, and Qualcomm are clients of TSMC. The same thing applies to up-and-coming firms like UNISOC, Spectra7, HiSilicon, and Allwinner Technology.

    Stellar programmable logic gadget firms Xilinx and earlier Altera take or took advantage of the factory facilities of TSMC.

    Certain integrated equipment makers that feature their indigenous manufacturing hubs, like NXP, Intel, Texas Instruments, and STMicroelectronics subcontract a particular portion of their fabrication to TSMC.

    LSI, a semiconductor maker, re-trades TSMC wafers via its ASIC blueprint facilities and blueprint IP assortment as a minimum.

    As of 2020, the worldwide manufacturing capability of TSMC is around 13 million 300 mm-equivalent wafers annually and it manufactures chips for users with process nodes ranging from 2 microns to 5 nanometers.

    Taiwan Semiconductor Manufacturing Company was the oldest fabrication hub to promote 5-nanometer and 7-nanometer (utilized by the MediaTek Dimensity 8100 and the M1 SoCs and 2020 Apple A14) manufacturing capacities. It was the first to market EUV (extreme ultraviolet) litho technology in significant quantity.

    What type of company is TSMC?

    TSMC is a publicly-traded company.

    What is the ISIN (International Securities Identification Number) of TSMC?

    The ISIN of the Taiwan-based company is US8740391003.

    To which industry does it belong?   

    TSMC is a part of the semiconductors industry.

    When did the company come into existence?

    The company came into existence as Industrial Technology Research Institute in Hsinchu, Taiwan in 1987. This was 36 years back.

    Who is the originator of TSMC?

    The originator of the company is Morris Chang.

    Where is the central office of TSMC located?

    The central office of the company is situated at Hsinchu Science Park in Taiwan.

    Which area does the company serve?

    The organization has a global customer base.

    Who are the key people managing the day-to-day affairs of the company?

    The eminent individuals supervising the everyday affairs of the Taiwanese firm are:

    • C. Wei (Vice Chairman and CEO)
    • Mark Liu (Chairman)

    What are the services that TSMC provides?

    The services provided by TSMC include the following:

    • Production of integrated circuits
    • Casing of integrated circuits
    • Mask services
    • Multi-wafer factory facilities

    What are the subsidiaries of TSMC?

    The following are the subsidiaries of the company:

    • TSMC Nanjing Company Ltd.
    • WaferTech
    • JASM
    • SSMC

    How many employees work for TSMC?

    As of 2021, the company has 65,152 workers.

    TSMC Chronology

    1986- Early years

    Li Kwoh-ting, standing for the Executive Yuan, requested Morris Chang in 1986 to function as the president of ITRI (the Industrial Technology Research Institute). During that moment, the Taiwanese administration wished to grow its semiconductor sector. However, its lofty investment and substantial risk feature caused complications in getting investors. Just Philips was ready to ratify a collaboration agreement with Taiwan for investing approximately 27.5% of the capital of the company.

    Since that time, the firm has kept on developing, notwithstanding conditional on the cycles of requirement. The firm intended to raise research and development outlays in 2011 by approximately 39% to NT$ 50 billion to avert mounting rivalry.

    Besides, the company prepared to grow its competence by 30% to fulfill robust market requirements in 2011. In 2014 May, the company’s board of directors sanctioned setting aside capital to the tune of US$ 568 million to grow and enhance fabrication capacities once the firm estimated more than the anticipated market requirement. In 2014 August, the firm’s board of directors okayed an extra capital allotment of US$ 3.05 billion.

    In 2011, there were statements that TSMC commenced trial-based manufacturing of the A6 SoCs and A5 SoC for iPhone and iPad gadgets of Apple. As stated by sources, Apple procured its A8X and A8 SoCs from Taiwan Semiconductor Manufacturing Company in May 2014.

    Subsequently, Apple procured the A9 SoC with both Samsung and TSMC (for growing capacity for iPhone 6S introduction) and the A9X particularly with TSMC. Therefore, the company settled the concern of procuring a chip in two separate microarchitecture dimensions.

    As of 2014, the most significant client of TSMC was Apple.

    In 2014 October, TSMC and ARM declared a fresh multi-year pact for the growth of ARM-oriented 10-nanometer FinFET central processing units.

    In 2020, Taiwan Semiconductor Manufacturing Company turned into the 1st semiconductor maker in the world to subscribe to the RE100 project. By 2050, it vowed to utilize 100% renewable energy. TSMC represents approximately 5% of the power usage in Taiwan, even beyond that of Taipei, the capital city. Therefore, they anticipated that this endeavor would speed up the conversion to renewable energy in Taiwan.

    In 2021, the manufacturing output of the company was 14 million 12” equivalent wafers, which showed a substantial boost.

    In 2022, TSMC attended to 532 clients and made 12,698 items for different apps encompassing a range of end markets such as the following:

    • Smartphones
    • High-performance computing
    • Automobile
    • IoT (The Internet of Things)
    • Digital consumer electronics

    In 2022, the yearly capability of the fabrication hubs supervised by TSMC and the ancillary companies surpassed fifteen million 12” equivalent wafers.

    These hubs include 4 8” wafer fabs, 4 12” wafer GIGAFAB® fabs, and 1 6” wafer fab. All of them are in Taiwan. There is one 12” wafer fab at TSMC Nanjing Company Limited, a wholly-owned subsidiary company, and 2 8” wafer fabs at TSMC China Company Limited and WaferTech in the US, both wholly-owned subsidiaries as well.

    In 2022 December, Taiwan Semiconductor Manufacturing Company proclaimed that other than the 1st fab of TSMC Arizona, which is programmed to start manufacturing N4 method expertise in 2024, the firm has also begun building a 2nd fabrication center. They expect to commence manufacturing of 3-nanometer method know-how machinery in 2026. Simultaneously, TSMC keeps on implementing its schedule for a fabrication facility in Kumamoto, Japan and aims the manufacturing for 2024.

    TSMC Expertise

    N7+ made by TSMC is the first marketable extreme-ultraviolet lithographic method in the semiconductor sector accessible to the customers.

    It applies ultraviolet prototyping and facilitates more fine-tuned electrical circuits to be applied to the silicon.

    N7+ provides a 15%-20% more transistor density and a 10% cutback in energy usage than earlier know-how.

    The N7 attained the quickest-ever quantity period to sell, sooner than 16 nanometers and 10 nanometers.

    The N5 looping performs twofold transistor density and boosts execution by an extra 15%.

    Manufacturing Capacities

    The node dimensions of TSMC for its silicon lithography on 300 mm wafers are:

    • 13 μm (choices: low-power (LP), general-purpose (G), high-execution low-voltage (LV)).
    • 90 nm (grounded on 80GC from Q4/2006)
    • 65 nm (choices: low-power (LP), general-purpose (GP), LPG, ultra-low power (ULP)).
    • 55 nm (choices: low-power (LP), general-purpose (GP)).
    • 40 nm (choices: low-power (LP), general-purpose (GP), ultra-low power (ULP)).
    • 28 nm (choices: high-performance mobile (HPM), high-performance (HP), high-performance low-power (HPL), high-performance computing (HPC), high-performance computing Plus (HPC+), low-power (LP), ultra-low power (ULP)) with HKMG.
    • 22 nm (choices: ultra-low leakage (ULL), ultra-low power (ULP))
    • 20 nm
    • 16 nm (choices: FinFET Plus (FF+), FinFET (FF), FinFET Compact (FFC))
    • 12 nm (choices: FinFET NVIDIA (FFN), FinFET Compact (FFC)), improved edition of 16 nm method.
    • 10 nm (choices: FinFET (FF))
    • 7 nm (choices: FinFET Plus (FF+), FinFET (FF), high-performance computing (HPC), FinFET Pro (FFP))
    • 6 nm (choices: FinFET (FF)), uncertainty manufacturing beginning in 2020 Q1, an improved variant of the 7 nm procedure.
    • 5 nm (choices: FinFET (FF))
    • 4 nm (choices: FinFET (FF)), uncertainty manufacturing commencing in 2021, superior edition of 5 nm method.

    Besides, it provides DFM (design for manufacturing) client services.

    TSMC Fabrication

    Other than its principal functional foundation in Hsinchu, North Taiwan, where many of its fabrication hubs are situated, it has state-of-the-art fabrication centers in Central Taiwan and Southern Taiwan as well. It has other fabrication hubs lying at its subsidiaries WaferTech in the state of Washington, United States, TSMC China in Shanghai, China, as well as SSMC in Singapore. The company has bureaus in Europe, China, Japan, India, South Korea, and North America.

    In 2020, the following fabrication hubs were functional:

    • 4 300 mm “GIGAFABs” functional in Taiwan: Fab 14 (Tainan), 12 (Hsinchu), 18 (Tainan), and 15 (Taichung)
    • 4 200 mm wafer fabrication facilities wholly functional in Taiwan: Fab 8, 5, 3 (Hsinchu), and Fab 6 (Tainan)
    • 200 mm, TSMC China Company Limited: Fab 10 (Shanghai)
    • 300 mm, TSMC Nanjing Company Limited: Fab 16 (Nanjing)
    • TSMC’s 100% owned American subsidiary, WaferTech L.L.C., a 200 mm fabrication hub: Fab 11 (Camas, Washington)
    • Systems on Silicon Manufacturing Co. (SSMC), a collaboration with NXP Semiconductors based in Singapore, a 200 mm fab, where manufacturing began at the close of 2002
    • 1 150 mm wafer fabrication center wholly functional in Taiwan – Fab 2 (Hsinchu)

    As of 2021, Fab is incompletely online:

    • 300 mm, Fab 18 (Tainan), phase III and IV

    As of 2021, the company has the following fabs on its schedule:

    • Arizona, USA (November 2021 – under development, projected to utilize 5-nanometer procedure)
    • Kumamoto, Japan (arranged ceremonial breaking in 2021, expected to utilize 28 nm and 22 nm procedure)

    There are four TSMC Backend Fabrication hubs in function:

    • Fab 1 – Hsinchu
    • Fab 2 – Tainan
    • Fab 3 – Taoyuan City
    • Fab 5 – Taichung

    TSMC Stock Performance

    The common stocks of Taiwan Semiconductor Manufacturing Company Limited are traded on the New York Stock Exchange (NYSE) with the ticker symbol TSM and the Taiwan Stock Exchange (TWSE) with the ticker symbol 2330.

    On May 26, 2023, Taiwan Semiconductor Manufacturing Company Limited (TSM) ended trading on the NYSE at $103.21 with the data furnished below at 04:00 pm EDT (Eastern Daylight Time).

    Stock Chart

    TSMC Financial Performance

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