For the last few days across the world, due to the Corona epidemic, we have faced lock down for several days during which the entire industry had to be closed for a long time. We are living in the era of information and technology and after the lock down, we heard about semiconductor shortages which forced many industries to reduce their production. Due to which we got to hear about the world’s most important company TSMC, which is a Taiwan base company, which is the most dominant company in this chip production.
Earlier, only business related people knew about this company, but due to lack of semiconductor, this company was seen in a lot of limelight. Information Technology This field is completely dependent on semiconductors, in which it is needed in everything from airplanes to home mixers. In today’s era, seeing its importance, all the countries have started huge investments for semiconductor production factory in their own country in the future to become self-reliant.
In which Europe, America to India have started working on it and TSMC is going to start its factory in India and America in the next few days. This sector is very risky, full of skill and based on huge investment, so we will try to understand the business model of this company that why companies fail in this field.
TSMC Business Profile –
- Founded – 1987
- Founder – Morris Cheng
- Head Office – Silicon Velly Taiwan
- Market Capital – 529.57 US $
- Chairman – Mark Liu
- CEO – C. C. Wei
- Products – 281 distinct process technologies & mfg. 11617 products with 510 customers
- Features – TSMC is the first foundry who makes the most advance chip of 5 NM production capacity in the world.
Taiwan Semiconductor Manufacturing Company / TSMC –
TSMC This Taiwan base company was founded by Morris Cheng, a PhD holder from MIT College, USA, who founded this company in 1987 after working for a few days in other technology companies. He is considered an expert in the semiconductor fabrication process, who has built the world’s most modern semiconductor ship, which is considered to be 5 nano-meters.
Apple, Intel, Nvidia are their main customers and they make up 25% of the world’s market for semiconductors and have established 92% dominance in the production of the most advanced 5 nanometer chips. Last 20 years ago, American companies have had a lot of influence in the technology sector, but leaving all these companies, TSMC has established a different place of its own in this area.
The company has 12 plants proposed across the world and is going to start its production in the US, Europe and India in the future. She has already established her service offices in India ,where she is working in collaboration with design companies. In the US, he has started his plant in Arizona city with an investment of 10 billion US dollars, which will start its production by 2025.
Who is the founder of TSMC?
Morris Cheng was originally a resident of Taiwan, but he completed his education at Harvard and MIT College and was pursuing his PhD in electronics in America, but despite many efforts, he did not succeed. While working as a manager at Texas Instrument, the company facilitated him to complete his PhD, and he eventually completed his PhD from Stanford University in 1964. He is considered a Taiwanese American resident and a well-known businessman.
He served 25 years at Texas Instrument and last served as Vice President and resigned from the company. After serving in the US for a long time, the politician Sunyan Suan invited him as the President of the Industrial Technology Research Institute of Taiwan. He started TSMC in 1987 with his vast semiconductor experience in USA.
Under his leadership, the company surpassed Intel and Samsung to become the world’s most important semiconductor fab company. In 2018, he resigned from the CEO position of the company and he started working as a mentor for the company. World’s toughest business model which he not only made successful but also made the world’s most important company.
What is the major business model innovation for TSMC?
Information technology started in the Silicon Valley of America and migrated to a small country like Taiwan, the main credit of which is given to the founder of the company, Morris Cheng, who found the world’s toughest business model who is afraid of doing good business. Tried it In which many established companies have been left behind, in which we can see a company like Intel.
He also achieved this success after working in the semiconductor industry for 25 years in America. There are three main processes of making a semiconductor chip, in which the design and fabrication of the chip is the primary function and the sale is the last and important function. For Semiconductor Fabrication Plant, the company has to spend the most which is up to 30-50 percent and it takes 2-3 years to establish this plant.
After placing an order to make a semiconductor, it takes three months to complete the whole process, so it is a very complicated process. From an initial investment of $10 billion to modification and efficient workforce, this is its specialty, yet there is no guarantee that it will be successful because changes keep happening very fast in this field and before your technology comes in the market, other new technology will replace it..
What caused TSMC chip shortage?
TSMC company’s dominance in the semiconductor fabrication sector all over the world, we came to know because of its lack in the market, this company was never highlighted before. The whole world is dependent on this company alone, so all the countries have started installing it, so Europe, America and India have invited TSMC to set up their foundry in India in view of such crisis in future.
Why is the TSMC company so important? The answer is that this company has a 92 percent share in the sale of the most advanced technology 5 nanometer chip in the semiconductor. These modern technologies are used for mobile, artificial intelligence and security devices. In the semiconductor fab segment, only Samsung makes this chip which it uses for its own production.
Companies like Intel and INVIDIA rely on TSMC’s technology, so you can guess that this company has left behind all the competitors in terms of revision and efficient employees. A company like Apple is a major customer of TSMC, 25 percent of which is made by the semiconductor company. This sector does not survive due to a very complicated process and TSMC company has become an expert in this since last 30 years.
What are the 8 steps of semiconductor manufacturing?
The following are the typical 8 steps of semiconductor manufacturing:
- Crystal Growth: The process of growing a high-purity single crystal of silicon, also known as a boule, is called crystal growth.
- Wafer Preparation: After the crystal is grown, the boule is sliced into thin wafers using a saw. The wafers are then chemically treated and polished to create a smooth surface.
- Photolithography: The process of transferring a pattern onto a wafer using light and chemicals is called photolithography. This step involves masking, exposing, and developing the wafer to create a pattern.
- Etching: Once the pattern is transferred onto the wafer, it is then etched using a chemical process that removes material to create the desired shape.
- Ion Implantation: Ion implantation is a process in which impurities are introduced into the wafer to alter its electrical properties. This is done by firing a beam of ions at the wafer.
- Deposition: Deposition is the process of adding material to the surface of the wafer. This step is used to create a thin layer of material on the wafer or to fill trenches and holes with material.
- Annealing: Annealing is the process of heating the wafer to a high temperature to activate the dopants and repair any damage caused by the previous steps.
- Testing and Packaging: Finally, the wafers are tested to ensure that they meet the required specifications. The chips are then separated from the wafer and packaged for distribution.
Samsung is the only company in the world that does all the semiconductor manufacturing process itself, from design to packaging, because Samsung works in the production of all items from mobile to electronic, for which it has a large scale of semiconductors. But it is needed. Companies such as Apple, Nvidia and more recently Intel have begun to outsource the semiconductor fabrication process.
Making a semiconductor is considered to be the most complex human-made production in the world because it requires a lot of investment and highly intelligent people. The changes taking place in this area are very fast, so the production is very risky, so no company wants to work in it. This process is carried out till the raw material to its fabrication plant to make silicon chips.
The company has to spend 5-10 percent for the design, but any company costs 30- 50 percent for the fabrication plant, so for most of the fabrication, the expert company depends on TSMC, its proof is 25 percent. The whole world has come to know about this company in this corona time for the advanced technology like 5 nano-meter like advanced semiconductor.
Who is bigger TSMC or Samsung?
These two companies are considered to be the world’s largest companies in the semiconductor fabrication business sector. Samsung This company’s made semiconductor chip is used for the product made by it, in which it makes its own chip for all electronic items like mobile TV, it means that the whole eco-system of electronic items is maintained by Samsung company.
The TSMC company is considered to specialize only in the semiconductor fabrication process and that is for Apple. It takes orders from big companies like Intel and does the design work itself. This is a USD 650 billion industry in which TSMC is considered to be a dominion in this sector due to very little competition in the fabrication sector.
TSMC is the world’s second largest company in terms of market capital. NVIDIA is the number one company in the United States that deals in all semiconductor processes from design to packaging. Samsung This company is considered to be the world’s third number company in this sector, which specializes in making TSMC and Samsung this 5 nanometer chip.
TSMC Company & Political Aspects –
Semiconductor production technology is going to be very important in the future politics of the world, as we have seen conflicts between many countries for oil and gas, similarly this area is going to be very important from the point of view of technology in the future. The political relations between Taiwan and China are already very tense and the growing proximity of Taiwan and America is causing a tense atmosphere in Asia.
In the midst of this, due to the lack of semiconductor production, all the countries from Europe to America have understood its importance and for this we get to see a lot of investment for the future. America’s fear is that if China occupied Taiwan, then their problems may increase because America is heavily dependent on TSMC’s semiconductor, so they have decided to start TSMC’s factory in America.
The US has imposed a lot of sanctions on China’s technology sector important company Huawei in the case of violating the Intellectual Property to reduce China’s international influence and violating the rules in the matter of US security, as a result of which on their semiconductor production. The US wants to reduce its dependence on China, so Taiwan is starting work to get the base company TSMC to set up its plant in the US.
How TSMC is dealing with chip shortage?
TSMC (Taiwan Semiconductor Manufacturing Company) is dealing with the chip shortage in several ways:
- Increasing Production: TSMC is ramping up production by investing in new manufacturing facilities and expanding existing ones. The company has also prioritized the production of high-demand products, such as automotive and consumer electronics chips.
- Expediting Orders: TSMC is working closely with its customers to expedite orders and meet their urgent needs. The company is also increasing its inventory of raw materials to ensure a steady supply chain.
- Investing in R&D: TSMC is investing heavily in research and development to develop new chip manufacturing processes that can produce more chips per wafer and reduce production costs.
- Collaborating with Customers: TSMC is collaborating with its customers to optimize their chip designs for manufacturing, which can help to reduce costs and improve yields.
- Prioritizing Key Customers: TSMC is prioritizing key customers, such as Apple and Qualcomm, who have high-volume chip demands and are willing to pay a premium for priority access to TSMC’s manufacturing capacity.
Overall, TSMC is taking a proactive approach to address the chip shortage by increasing production, expediting orders, investing in R&D, collaborating with customers, and prioritizing key customers.
Why does Taiwan and TSMC dominate the semiconductor industry?
There are several reasons why Taiwan and TSMC (Taiwan Semiconductor Manufacturing Company) have become dominant players in the semiconductor industry:
- Proximity to Major Markets: Taiwan is located close to major markets such as China, Japan, and South Korea, which are all major consumers of semiconductors. This makes it easier and more cost-effective for Taiwanese semiconductor companies to ship their products to these markets.
- Government Support: The Taiwanese government has been supportive of the semiconductor industry, providing tax incentives, research grants, and other forms of support to help companies like TSMC grow and thrive.
- High-Quality Talent Pool: Taiwan has a highly skilled workforce with a strong background in engineering and technology. This talent pool has helped to drive innovation and growth in the semiconductor industry.
- Strong Supply Chain: Taiwan has a strong supply chain that includes companies that provide raw materials, equipment, and services to the semiconductor industry. This ecosystem has helped to foster innovation and growth in the industry.
- Investment in R&D: TSMC and other Taiwanese semiconductor companies have invested heavily in research and development, leading to the development of cutting-edge manufacturing processes and technologies that have helped to drive their success.
Overall, Taiwan and TSMC have become dominant players in the semiconductor industry due to their proximity to major markets, government support, high-quality talent pool, strong supply chain, and investment in R&D.
Why TSMC is so important?
TSMC (Taiwan Semiconductor Manufacturing Company) is considered an important player in the semiconductor industry for several reasons:
- Leading-Edge Manufacturing: TSMC is one of the world’s leading manufacturers of semiconductors, particularly when it comes to advanced process technology. The company is at the forefront of developing cutting-edge manufacturing processes that allow for the production of smaller and more complex chips.
- Broad Customer Base: TSMC has a broad customer base that includes some of the world’s leading technology companies, such as Apple, Nvidia, and Qualcomm. The company’s ability to meet the demanding needs of these customers has helped to establish its reputation as a key player in the industry.
- Global Reach: TSMC has a global presence with manufacturing facilities in Taiwan, China, and the United States. This allows the company to serve customers in different regions of the world and helps to mitigate risks associated with supply chain disruptions.
- Innovation: TSMC has a strong focus on innovation, investing heavily in research and development to develop new manufacturing processes and technologies. This has helped to keep the company at the forefront of the industry and maintain its competitive edge.
- Economic Impact: TSMC is a major contributor to the global economy, with its products being used in a wide range of applications, including smartphones, computers, and automobiles. The company also provides thousands of jobs and contributes to local communities through its philanthropic efforts.
Overall, TSMC is considered an important player in the semiconductor industry due to its leading-edge manufacturing capabilities, broad customer base, global reach, innovation, and significant economic impact.
Key Features of TSMC Company –
- TSMC is considered to be the dominant company in the semiconductor fabrication sector, which manufactures the world’s most advanced chip 5 nanometers.
- The company spent approximately US$4 billion in 2021 and this spending is expected to increase significantly for the foreseeable future.
- Taiwan receives the highest rainfall in the world, so this has been a plus point for the company to get pure water to be applied.
- The company’s founding president, Morris Cheng, founded the company in Taiwan in 1987 after spending 25 years of his life working in the semiconductor industry in the United States.
- Until the 1990s, Intel was considered the dominant company for semiconductors, but after that TSMC has established its dominance and this company manufactures 92 percent of the 5 nanometer chips.
- TSMC has a total of 12 fab company plants and new plants are under construction in the US and India.
- The most important customer of TSMC is the Apple company, with 25 percent of its orders being held by the company.
- The TSMC company became famous in front of the world when the semiconductor shortage was seen by the whole world during the pandemic time.
- TSMC This company is an expert in the semiconductor fabrication process and has established dominance in the market.
- The technology in this field is constantly changing, for this, continuous modification has to be spent and expert employees are required which the company has.
Countries like India and America have to depend on TSMC company, so these countries have proposed to start production in their own country by agreement with the company, for this semiconductor production can start in America by 2025. India has also tried to increase the self-sufficiency of the semiconductor chip by giving such proposals to many other companies for this.
China has always celebrated Taiwan as its share, but due to this America has started feeling insecure, this is one reason that America has started the plant of the TSMC company in its country, it is considered to be such an important production’s conductor. The information technology is completely based on semiconductor chip and in the fabrication process only this company’s mass production all over the world.
We tried to find out how this company could make itself successful in such a complex manufacturing area. A significant part of the country’s development from Semiconductor in Taiwan is where the company operates its production operations in the small town. The natural environment of Taiwan has been very important for this production, which is not seen anywhere else.