Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest and most advanced contract chipmaker. Founded in 1987 and based in Hsinchu, Taiwan, the company has become essential to global technology infrastructure. TSMC manufactures chips for many of the world’s top tech firms, including Apple, Nvidia, AMD, and Qualcomm. Unlike other semiconductor firms, TSMC does not design chips. Instead, it focuses entirely on manufacturing semiconductors based on designs provided by its clients.
TSMC has led the industry in producing advanced process nodes. It was the first chip foundry to mass-produce 5nm and 3nm chips. The company is now investing heavily in next-generation 2nm technology using gate-all-around transistor architecture. These innovations allow devices to run faster and consume less power. TSMC’s advanced manufacturing capabilities have positioned it ahead of competitors such as Samsung Foundry and Intel Foundry Services.
The company operates several large fabrication plants, known as fabs, across Taiwan. Fab 15 and Fab 18 are among its most advanced facilities, handling the production of 5nm and 3nm chips. With global demand for chips surging, TSMC is expanding its operations beyond Taiwan. The company is building new fabs in the United States, Japan, and Germany. In Arizona, TSMC is investing $40 billion in two fabs that will produce 5nm and 3nm chips. In Japan, the company is partnering with Sony and other firms to build a new plant focused on automotive and industrial chips. In Germany, a fab is being planned in Dresden to support the European market.
TSMC plays a central role in the global chip supply chain, powering everything from smartphones and laptops to cars and data centers. This makes the company strategically important not just to the tech industry, but to national governments as well. The U.S., Japan, and the EU have all introduced incentives to attract TSMC investment and reduce dependence on overseas chip production.
The importance of Taiwan Semiconductor Manufacturing has also made it a focal point in geopolitical tensions between China and the United States. Taiwan, where TSMC is headquartered, is claimed by China as part of its territory, a claim rejected by Taiwan. As U.S.-China competition over technology grows, TSMC has found itself caught in the middle. The company must comply with U.S. export control regulations because much of its chipmaking equipment and software originates from the United States.
TSMC has halted shipments to some Chinese firms due to these regulations. One high-profile case involved Huawei. After a Canadian research firm discovered a TSMC chip inside Huawei’s advanced 910B AI processor, the company suspended shipments to Sophgo, a Chinese chip designer with a similar product. U.S. authorities also ordered TSMC to halt more shipments to Chinese customers. Huawei is a major target of U.S. restrictions due to its central role in China’s AI development and its ties to China’s military-industrial complex.
Another Chinese firm, Semiconductor Manufacturing International Corporation (SMIC), has also come under scrutiny. Taiwan recently added Huawei and SMIC to its export control list. This means Taiwanese companies must seek government approval before selling certain products to them. Taiwan’s government is determined to protect its technology and prevent Chinese companies from recruiting Taiwanese chip engineers or stealing industrial secrets.
TSMC continues to grow its global presence while remaining vital to Taiwan’s economy and the broader global technology ecosystem. The company’s leadership in advanced chip manufacturing makes it indispensable in the digital age. As nations compete for semiconductor dominance, Taiwan Semiconductor Manufacturing remains at the heart of the industry’s future.
