Picks-and-shovels of smart tech and Internet of Things

Established in 1987, TSMC is a dedicated semiconductor foundry (manufacturer). TSMC was the pioneer of the foundry model, which separated semiconductor chip designs (produced by fabless companies) from the fabrication or manufacturing process (outsourced to a foundry). Over the last 30 years, foundries have gained market share from traditional integrated design and manufacturing chip companies. There were two main reasons for this: on the manufacturing side, the process has become more complicated and capital intensive; while on the customer side, more fabless (e.g. Nvidia) and system companies (e.g. Apple) have emerged. 

TSMC has become the world’s largest dedicated contract chip manufacturer, with more than 50% market share. Growth has remained strong due to its advanced technology and strategy of being ‘everyone’s foundry’; that is, partnering with instead of competing with its customers. As long as semiconductor demand continues to grow – which we believe likely with devices becoming more complex and requiring increasingly powerful processors – TSMC should continue to thrive.