Why Taiwan´s TSMC is such a Breathtaking Company in the Semiconductor field!

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is a Taiwanese multinational semiconductor contract manufacturing and design company. It is the world’s second-most valuable semiconductor company, the world’s largest dedicated independent (“pure-play”) semiconductor foundry and its country’s largest company.

And so it is no surprise that executives at Taiwan Semiconductor Manufacturing (TSMC) recently announced at an event that it is entering a “new golden age” for chips. They also forecast a 10% annual growth rate for the global semiconductor industry, excluding memory chips. TSMC itself is predicting a revenue growth of over 20% in 2024.

Let’s explore why TSMC will be a significant beneficiary of the thriving semiconductor market.

Many semiconductor companies, including Nvidia, operate using a fabless model, meaning they design the chips but outsource the manufacturing. This manufacturing is handled by semiconductor contract manufacturers, which specialize in producing chips in their fabrication facilities, or foundries.

TSMC is the world’s largest semiconductor contract manufacturer. It has long benefited from the increasing use of semiconductors in everyday devices, from computers and smartphones to automobiles. With the rise of artificial intelligence (AI) and the growing demand for AI infrastructure, TSMC’s services are in even higher demand.

The company’s advanced packaging capacity has already been fully booked for this year and the next, as cloud computing companies scramble to acquire GPUs (graphics processing units) from companies like Nvidia and Advanced Micro Devices to meet AI application needs.

To address the demand for high-performance computing chips, TSMC is rapidly expanding its chip-on-wafer-on-substrate (CoWoS) advanced packaging capacity. Industry reports indicate that TSMC plans to increase its monthly CoWoS capacity from 15,000 units at the end of last year to 50,000 units by the end of 2025.

TSMC is also adding more fabrication facilities. It recently completed its first specialty technology foundry in Japan and announced a second one, expected to be finished by 2027. Additionally, TSMC has completed its first fab in Arizona, which has begun wafer production, and plans to build a third facility in the state. The company also intends to start constructing a German fab focused on automotive and industrial applications later this year.

With capacity constraints and strong demand, TSMC appears to have a significant growth trajectory ahead and will also be a breathtaking company in the future.