The Chip King Faces The Crunch

TSMC has mastered the business of semiconductors, but staying on top of the politics is only getting trickier

- Debby Wu, with Ian King and Isabel Reynolds

Decades before he founded Taiwan Semiconductor Manufacturing Co., Morris Chang was present at the creation of modern Silicon Valley. He reminisced at an event this April about being at an industry conference with Gordon Moore and Robert Noyce in 1958, 10 years before they started Intel Corp. The three men attended sessions all day, let the beer flow at dinner, and sang at the top of their lungs all the way back to their hotel, according to Chang. “We felt favored by the gods,” he said.

Moore and Noyce’s company went on to become one of Silicon Valley’s most legendary institutions before stumbling in recent years. It’s Chang’s TSMC that now seems like the blessed one, the result of his early embrace of an untested business model and deft execution that’s made TSMC the leader in the most advanced types of semiconductors on the market today. It dominates the smartphone sector, and its chips are in everything from cars to fighter jets. The Covid-19 pandemic further cemented its dominance. TSMC’s 2020 revenue was $45.5 billion, a 31% increase from the year before, and its adjusted net income of $17.3 billion dwarfed its profits from any previous year. The company is now worth about $590 billion, more than two and a half times Intel’s market value.