|Founded||Industrial Technology Research Institute, Hsinchu, Taiwan
|Brands||CyberShuttle prototyping service, Open Innovation Platform, eFoundry online services|
|Services||Manufacture of Integrated circuits and related services|
Number of employees
|Footnotes / references
Taiwan Semiconductor Manufacturing Company, Limited (TSMC; Chinese: 臺灣積體電路製造公司), is the world’s largest dedicated independent (pure-play) semiconductor foundry, with its headquarters and main operations located in the Hsinchu Science and Industrial Park in Hsinchu, Taiwan.
TSMC is also occasionally referred to as Taiwan Semiconductor or TSM, but it’s unrelated to another similarly named company Taiwan Semiconductor Co Ltd (TSC), which is a manufacturer of discrete semiconductor components.
Founded in Taiwan in 1987 by Morris Chang, TSMC was the world’s first dedicated semiconductor foundry and has long been the leading company in its field. It is listed on both the Taiwan Stock Exchange (TWSE: 2330) and the New York Stock Exchange (NYSE: TSM). Mark Liu serves as Chairman and C. C. Wei serves as CEO and Vice Chairman.
Most of the leading fabless semiconductor companies such as Advanced Micro Devices (AMD), Apple Inc., Broadcom Inc., Marvell, MediaTek, Nvidia, and Qualcomm are customers of TSMC, as well as emerging companies such as Allwinner Technology, AppliedMicro, HiSilicon, Spectra7, and Spreadtrum. Leading programmable logic device companies Xilinx and previously Altera also make or made use of TSMC’s foundry services. Some integrated device manufacturers that have their own fabrication facilities like Intel, STMicroelectronics and Texas Instruments outsource some of their production to TSMC. At least one semiconductor company, LSI, re-sells TSMC wafers through its ASIC design services and design IP-portfolio.
The company has been increasing and upgrading its manufacturing capacity for most of its existence, although influenced by the demand cycles of the semiconductor industry. In 2011, the company planned to increase research and development expenditures by almost 39% to NT$50 billion in an effort to fend off growing competition. The company also planned to expand capacity by 30% in 2011 to meet strong market demand. In May 2014, TSMC’s board of directors approved capital appropriations of US$568 million to establish, convert, and upgrade advanced technology capacity after the company forecast higher than expected demand. In August 2014, TSMC’s board of directors approved additional capital appropriations of US$3.05 billion.
In 2011, it was reported that TSMC had begun trial production of the A5 SoC and A6 SoCs for Apple’s iPad and iPhone devices. According to reports, as of May 2014, Apple is sourcing its new A8 and A8X SoCs from TSMC and later sourced the A9 SoC with both TSMC and Samsung (to increase volume for iPhone 6s launch) with the A9X being exclusively made by TSMC, thus resolving the issue of sourcing a chip in two different microarchitecture sizes. Apple has become TSMC’s most important customer.
TSMC’s market capitalization reached a value of NT$1.9 trillion (US$63.4 billion) in December 2010. It was ranked 70th in the FT Global 500 2013 list of the world’s most highly valued companies with a capitalization of US$86.7 billion, while reaching US$110 billion in May 2014. In March 2017, TSMC’s market capitalisation surpassed that of semiconductor giant Intel for the first time, hitting NT$5.14 trillion (US$168.4 billion), with Intel’s at US$165.7 billion.
GlobalFoundries vs. TSMC et al
On August 26, 2019, GlobalFoundries filed patent infringement lawsuits against TSMC in the US and Germany. GlobalFoundries claim TSMC’s 7 nm, 10 nm, 12 nm, 16 nm, and 28 nm nodes have infringed on 16 of their patents. Lawsuits were filed in the U.S. International Trade Commission, the U.S. Federal District Courts in the Districts of Delaware and the Western District of Texas, and the Regional Courts of Düsseldorf and Mannheim in Germany. GlobalFoundries has named 20 defendants: Apple, Broadcom, MediaTek, Nvidia, Qualcomm, Xilinx, Arista, ASUS, BLU, OnePlus, Avnet|Avnet/EBV, Digi-Key and Mouser. On August 27, TSMC announced they are reviewing the complaints filed, but are confident that the allegations are baseless and will vigorously defend their proprietary technology.
On October 1, 2019, TSMC filed patent infringement lawsuits against GlobalFoundries in the US, Germany and Singapore. TSMC claim GlobalFoundries’ 12 nm, 14 nm, 22 nm, 28 nm and 40nm nodes have infringed on 25 of their patents.
On October 29, 2019, TSMC and GlobalFoundries announced a resolution to the dispute. The companies agreed to a new life-of-patents cross-license for all of their existing semiconductor patents as well as new patents to be filed by the companies in the next ten years.
On 12-inch wafers TSMC has silicon lithography on node sizes:
- 0.13 μm (options: general-purpose (G), low-power (LP), high-performance low-voltage (LV)).
- 90 nm (based upon 80GC from Q4/2006),
- 65 nm (options: general-purpose (GP), low-power (LP), ultra-low power (ULP), LPG).
- 55 nm (options: general-purpose (GP), low-power (LP)).
- 40 nm (options: general-purpose (GP), low-power (LP), ultra-low power (ULP)).
- 28 nm (options: high-performance (HP), high-performance mobile (HPM), high-performance computing (HPC), high-performance low-power(HPL), low-power (LP), high-performance computing Plus (HPC+), ultra-low power (ULP)) with HKMG.
- 22 nm (options: ultra-low power (ULP), ultra-low leakage (ULL))
- 20 nm
- 16 nm (options: FinFET (FF), FinFET Plus (FF+), FinFET Compact (FFC))
- 12 nm (options: FinFET Compact (FFC), FinFET NVIDIA (FFN)), enhanced version of 16 nm process.
- 10 nm (options: FinFET (FF))
- 7 nm (options: FinFET (FF), FinFET Plus (FF+), FinFET Pro (FFP), high-performance computing (HPC))
- 6 nm (options: FinFET (FF)), risk production starting in Q1 2020, enhanced version of 7 nm process.
- 5 nm (options: FinFET (FF)), risk production started in Q2 2019
It also offers “design for manufacturing” (DFM) customer services.
In press publications these processes will often be referenced, for example, for the mobile variant, simply by 7nmFinFET or even more briefly by 7FF.
TSMC is at the beginning of 2019 advertising N7+, N7, and N6 as its leading edge technologies.
Apart from its main base of operations in Hsinchu in Northern Taiwan, where several of its fab facilities are located, it also has leading-edge fabs in Southern Taiwan and Central Taiwan, with other fabs located at its subsidiaries TSMC China in Shanghai, China, WaferTech in Washington State, USA, and SSMC in Singapore, and it has offices in China, Europe, India, Japan, North America, and South Korea.
The following fabs are in operation as of 2018:
- Three 300 mm (12 inch) “GIGAFABs” in operation in Taiwan: Fab 12 (Hsinchu), 14 (Tainan), 15 (Taichung)
- Four 200 mm (8 inch) wafer fabs in full operation in Taiwan: Fab 3, 5, 8 (Hsinchu) , 6 (Tainan)
- TSMC China Company Limited, 200 mm (8 inch): Fab 10 (Shanghai)
- TSMC Nanjing Company Limited, 300 mm (12 inch): Fab 16 (Nanjing)
- WaferTech L.L.C., TSMC’s wholly owned US subsidiary, a 200 mm (8 inch) fab: Fab 11 (Camas, Washington)
- SSMC (Systems on Silicon Manufacturing Co.), a joint venture with NXP Semiconductors in Singapore, 200 mm (8 inch), where production started at the end of 2002
- One 150 mm (6 inch) wafer fab in full operation in Taiwan: Fab 2 (Hsinchu)
Fab under construction as of 2018:
- Fab 18, 300 mm (12 inch) (Tainan), phase 1 equipment installation completed in March 2019
TSMC has four Backend Fabs under operation: Fab 1 (Hsinchu), 2 (Tainan), 3 (Taoyuan City), and 5 (Taichung)
The investment of US$9.4 billion to build its third 12-inch (300 mm) wafer fabrication facility in Central Taiwan Science Park (Fab 15) was originally announced in 2010. The facility was expected to output over 100,000 wafers a month and generate $5 billion per year of revenue. TSMC has continued to expand advanced 28 nm manufacturing capacity at Fab 15.
On 12 January 2011, TSMC announced the acquisition of land from Powerchip Semiconductor for NT$2.9 billion (US$96 million) to build two additional 300 mm fabs to cope with increasing global demand, which would result in Fab 12B.
WaferTech, a subsidiary of TSMC, is a pure-play semiconductor foundry located in Camas, Washington, USA. It is the second largest pure-play foundry in the United States. The facility employs 1100 workers. The largest is GlobalFoundries Fab 8 in Malta, NY, which employes over 3,000 workers with over 3 million sq. ft. under rooftop.
WaferTech was established in June 1996 as a joint venture with TSMC, Altera, Analog Devices, and ISSI as key partners. The four companies along with minor individual investors invested US$1.2 billion into this venture, which was at the time the single largest startup investment in the state of Washington. The company started production in July 1998 in its 200 mm (8 inch) semiconductor fabrication plant. Its first product was a 0.35 micrometer part for Altera.
TSMC bought out the joint venture partners in 2000 and acquired full control, and currently operates it as a fully owned subsidiary.
WaferTech is based in Camas, 20 miles (30 km) outside of Portland, Oregon. The WaferTech campus contains a 1 million square foot (90,000 m²) complex housed on 260 acres (1 km²). The main fabrication facility consists of a 130,000 square feet (12,000 m²) 200 mm (8 inch) wafer fabrication plant.
Sales and market trends
TSMC’s sales have increased from NT$44 billion (US$1.5 billion) in 1997 to NT$763 billion (approximately US$25 billion) in 2014, while net income was NT$264 billion (US$9 billion) in 2014 with a gross profit margin of 50%.
TSMC and the rest of the foundry industry are exposed to the highly cyclical nature of the semiconductor industry. During upturns, TSMC must ensure that it has enough production capacity to meet strong customer demand. However, during downturns, it must contend with excess capacity because of weaker demand, and the high fixed costs associated with its manufacturing facilities. As a result, the company’s financial results tend to fluctuate with a cycle time of a few years. This is more apparent in earnings than revenues because of the general trend of revenue and capacity growth. TSMC’s business has generally also been seasonal with a peak in Q3 and a low in Q1.
In 2014, TSMC was at the forefront of the foundry industry for high-performance, low-power applications, leading major smartphone chip companies such as Qualcomm, Mediatek and Apple to place an increasing amount of orders. While the competitors in the foundry industry (primarily GlobalFoundries and United Microelectronics Corporation) have encountered difficulties ramping leading-edge 28 nm capacity, the leading Integrated Device Manufacturers such as Samsung and Intel that seek to offer foundry capacity to third parties were also unable to match the requirements for advanced mobile applications.
For most of 2014, TSMC saw a continuing increase in revenues due to increased demand, primarily due to chips for smartphone applications. TSMC raised its financial guidance in March 2014 and posted ‘unseasonably strong’ first-quarter results. For Q2 2014, revenues came in at NT$183 billion, with 28 nanometer technology business growing more than 30% from the previous quarter. Lead times for chip orders at TSMC increased due to a tight capacity situation, putting fabless chip companies at risk of not meeting their sales expectations or shipment schedules, and in August 2014 it was reported that TSMC’s production capacity for the fourth quarter of 2014 was already almost fully booked, a scenario that had not occurred for many years, which was described as being due to a ripple-effect due to TSMC landing CPU orders from Apple.
However, monthly sales for 2014 peaked in October, decreasing by 10% in November due to cautious inventory adjustment actions taken by some of its customers. TSMC’s revenue for 2014 saw growth of 28% over the previous year, while TSMC has forecast that revenue for 2015 will grow by 15 to 20 percent from 2014, thanks to strong demand for its 20 nm process, new 16 nm FinFET process technology as well as continuing demand for 28 nm, and demand for less advanced chip fabrication in its 8-inch fabs.