A Brief History of TSMC Through 2025

Taiwan Semiconductor Manufacturing Company, the world’s largest dedicated semiconductor foundry, has transformed from a modest startup into a global technology powerhouse. Founded on February 21, 1987, by Morris Chang, a veteran of Texas Instruments, TSMC pioneered the “pure-play” foundry model. This innovative approach separated chip design from manufacturing, allowing fabless companies to outsource production without competing directly with integrated device manufacturers (IDMs).

Historically, IDMs dominated the industry before the 1980s rise of specialization. Companies like Intel pioneered this model, optimizing processes for proprietary designs. Major IDMs today include Intel, Samsung Electronics, Texas Instruments, Infineon, STMicroelectronics, and Renesas.

Chang, recruited by Taiwan’s government to head the Industrial Technology Research Institute (ITRI), envisioned TSMC as a neutral partner. Initial capital came from the Taiwanese government (48%), Philips (28%, with technology transfer), and private investors. Located in Hsinchu Science Park, TSMC’s early focus was on mature processes like 1-micron CMOS, serving fabless startups.

The 1990s brought rapid growth. TSMC went public on the Taiwan Stock Exchange in 1994 and listed ADRs on the NYSE in 1997, the first Taiwanese company to do so. Technological milestones included 0.5-micron in 1994, 0.35-micron copper interconnects, and overseas ventures like WaferTech in the U.S. (1996). Despite challenges like the 1997 Asian financial crisis and 1999 earthquake, revenue soared, reaching over 50% foundry market share by 2000.

Entering the 2000s, TSMC advanced to 0.13-micron (2002) and 90nm (2004), powering the PC and mobile booms. The Open Innovation Platform (OIP) launched in 2008 fostered ecosystem partnerships. Leadership saw Chang retire briefly (2005-2009) before returning amid the global financial crisis. By 2010, revenue hit $13.9 billion, with nodes like 28nm ramping.

The 2010s marked dominance in advanced nodes. Co-CEOs Mark Liu and C.C. Wei took over in 2013, with Chang as chairman until 2018. Breakthroughs included 16nm FinFET (2015), 10nm (2017), 7nm with EUV (2019), and capturing Apple’s A-series chips from Samsung. Revenue reached $45 billion by 2020, market share ~55%. Geopolitical tensions emerged, including U.S. sanctions halting Huawei shipments.

The 2020s accelerated amid COVID shortages and AI surge. 5nm (2020), 4nm (2021), and 3nm (2022) debuted, powering Apple’s M-series and Nvidia’s GPUs. In 2025, 2nm (N2) entered mass production late in the year, offering 10-15% speed gains or 25-30% power savings over 3nm, using gate-all-around transistors. A16 (1.6nm) is slated for 2026/2027 with backside power delivery.

Global expansion diversified risks. Arizona’s Fab 21 began N4 production in Q4 2024, with yields matching Taiwan. By 2025, investment swelled to $165 billion for six fabs, two packaging sites, and R&D—third fab groundbreaking in April for N2/A16. Japan’s JASM (Kumamoto) started mature nodes in 2024, expanding to advanced. Germany’s ESMC (Dresden) progresses for automotive/specialty.

Financially, TSMC is thriving on AI demand. Q3 2025 revenue grew 30% YoY, with 72% foundry share. TTM revenue ~$88 billion, market cap ~$1.5 trillion. Advanced nodes (<7nm) drive ~74% wafer revenue.

Bottom Line: TSMC’s “trusted foundry” status stems from IP protection, neutrality, and innovation. From 1987’s vision to 2025’s AI linchpin, it powers global tech while navigating geopolitics. With C.C. Wei as CEO, TSMC targets net-zero by 2050 and continued leadership in the angstrom era.

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