Technology has become one of the most important fields of global geopolitics in recent years, and semiconductor manufacturing is one of the hottest spots in the technological battle between the United States and China. In this context, Taiwan, a small island state in East Asia, has become a key center for the production of these devices, thanks to companies such as TSMC, founded by Morris Chang in 1987.
TSMC is currently the global leader in semiconductor manufacturing, with a 56% market share. This company, along with other Taiwanese companies such as UMC, PSMC and VIS, account for more than 90% of the world’s microchip manufacturing. The only other company that can boast a significant market share outside Taiwan is Samsung, with a 16% share. Chinese companies have not yet managed to compete with Taiwanese and South Korean companies in this market.
Semiconductor manufacturing is a complex and costly process, requiring large investments in research and development, as well as in state-of-the-art machinery and technology. Most companies that manufacture electronic devices do not have the capacity or resources to produce their own semiconductors, so they contract with companies that specialize in microchip manufacturing, such as TSMC, to do it for them.
TSMC and other semiconductor manufacturing companies, known as foundries, are responsible for producing integrated circuits for other companies, which typically control the intellectual property and ultimate marketing of the microchips. This allows these companies to outsource semiconductor manufacturing and focus on the design and marketing of their products, saving enormous costs that would be involved in setting up their own manufacturing plant.
This complex supply chain has been the subject of much criticism in recent years, especially due to offshoring processes that have moved production centers away from Europe and North America. However, it remains an enormously lucrative business: in 2021, the foundry sector generated revenues of almost $110 billion, while the semiconductor industry as a whole stood at $556 billion.
The importance of semiconductor manufacturing lies not only in the fact that these devices are essential for the manufacture of computers, phones, cars and airplanes, but also that they play an increasingly important role in global geopolitics. The trade dispute between the United States and China has led to increased trade restrictions and sanctions affecting technology companies in both countries, highlighting the importance of having a reliable source of semiconductor supply. In this context, Taiwan and its semiconductor manufacturing companies have become a strategic point for the technology industry worldwide.