Taiwan Semiconductor Manufacturing Company Limited (TSM): history, ownership, mission, how it works & makes money

A Brief History of Taiwan Semiconductor Manufacturing Company Limited (TSM)

Establishment and Initial Growth

Taiwan Semiconductor Manufacturing Company Limited (TSMC) was founded in February 1987 in Hsinchu, Taiwan, by Morris Chang. The company was established as the world's first dedicated semiconductor foundry.

In its first year, TSMC reported revenues of NT$ 1.01 billion (approximately US$ 36 million), producing around 90,000 wafers.

Technological Advancements

TSMC introduced a 5-micron process technology in 1994 and achieved 0.25-micron technology in 1997. By 2000, TSMC had launched the 0.18-micron process.

Public Listing

TSMC went public on the Taipei Stock Exchange in 1994, with an initial public offering (IPO) price of NT$ 35. The company later listed on the New York Stock Exchange (NYSE) under the symbol TSM in 1997.

Financial Growth

By 2001, TSMC's revenue had risen to NT$ 102.8 billion (approximately US$ 3.3 billion), with a net income of NT$ 28.1 billion (approximately US$ 933 million).

In 2022, TSMC reported revenues of NT$ 2.24 trillion (approximately US$ 74 billion) with a net income of NT$ 882 billion (approximately US$ 29.5 billion).

Global Expansion

TSMC has established multiple fabrication plants, including a significant facility in Arizona, USA, which commenced construction in 2020. The investment for this facility is approximately US$ 12 billion and is expected to produce 5nm nodes by 2024.

In 2020, TSMC announced plans to invest US$ 100 billion over three years to expand its manufacturing capacity and enhance technology.

Research and Development

In 2021, TSMC's R&D expenditure amounted to NT$ 81 billion (approximately US$ 2.8 billion), representing around 4.0% of total revenues.

Market Position

As of 2023, TSMC holds approximately 54% of the global semiconductor foundry market share, reinforcing its position as the largest contract chipmaker in the world.

Environmental Initiatives

TSMC aims to achieve net-zero greenhouse gas emissions by 2050. In 2021, the company reported a 18% decrease in water usage intensity and a 17% decrease in carbon emissions intensity compared to 2020.

Summary of Key Financial Metrics (2022)

A Who Owns Taiwan Semiconductor Manufacturing Company Limited (TSM)

Ownership Structure

The ownership of Taiwan Semiconductor Manufacturing Company (TSMC) is divided among various institutional and individual shareholders. As of the latest available data, TSMC has approximately 25.58 billion shares outstanding.

Major Shareholders

The following table outlines the major shareholders of TSMC, along with their respective ownership percentages as of the end of 2022:

Institutional Ownership

As of 2023, institutional ownership has been recorded at approximately 74.6%, emphasizing the significant role played by institutional investors in TSMC's stock. Notably, the largest institutional investors are:

• BlackRock, Inc. - 5.03%
• The Vanguard Group, Inc. - 3.49%
• State Street Corporation - 3.04%
• JP Morgan Chase & Co. - 1.29%
• Capital Research Global Investors - 1.01%

Foreign Ownership

Foreign ownership of TSMC shares has been climbing, reflecting the company's global appeal. As of 2022, approximately 62% of TSMC's shares were held by foreign investors, indicating strong international interest.

Market Capitalization

As of October 2023, TSMC's market capitalization stands at approximately $450 billion, making it one of the largest semiconductor companies globally.

Recent Financial Metrics

Financial performance metrics from the latest quarterly report (Q2 2023) include:

Executive Leadership

Key executives at TSMC include:

• CC Wei - CEO
• Wong Sean - Vice Chairman
• Elizabeth Sun - Senior Vice President, Head of Worldwide Sales
• Yuan-Shan Liu - Chief Financial Officer
• Jin-Yang Liu - Chief Technology Officer

Stock Performance

TSMC's stock performance for the year-to-date as of October 2023 demonstrates the following metrics:

Summary of Shareholder Benefits

Shareholders of TSMC benefit from:

• Regular dividend payments
• Potential for capital appreciation
• Participation in strategic growth initiatives
• Influence on corporate governance through voting rights
• Access to financial performance updates and reports

Taiwan Semiconductor Manufacturing Company Limited (TSM) Mission Statement

Overview of TSMC

Taiwan Semiconductor Manufacturing Company Limited (TSMC) positions itself as the world’s leading dedicated semiconductor foundry. As of 2023, TSMC has a market capitalization of approximately $566 billion.

Mission Statement

TSMC’s mission statement emphasizes their commitment to technology leadership, customer partnership, and sustainable development. Specifically, the company aims to:

• Provide high-quality, innovative solutions to semiconductor design companies.
• Lead the foundry sector through advanced process technology.
• Deliver operational excellence and superior customer service.
• Commit to environmental sustainability and corporate social responsibility.

Financial Performance

TSMC reported total revenue of $75.9 billion in 2022, with an operating income of $36.3 billion, reflecting a year-on-year revenue growth rate of 8.7%.

Market Position

As of 2023, TSMC holds a global semiconductor foundry market share of approximately 54%. The company is responsible for manufacturing over 12,000 different products for more than 500 clients worldwide.

Key Customers

Technology Development

TSMC has continually invested in research and development, spending approximately $4.5 billion in R&D in 2022. The company is advancing towards leading-edge technologies, such as:

• 3nm process technology, with expected production in 2023.
• 2nm process technology, projected for introduction in 2025.

Sustainability Initiatives

TSMC has set a target to achieve net-zero emissions by 2050. The company aims to increase renewable energy usage to more than 50% by 2030.

Global Footprint

TSMC has manufacturing facilities located in:

• Taiwan
• China
• United States

In 2022, TSMC announced plans to invest $40 billion in a new facility in Arizona.

Employee Workforce

As of 2023, TSMC employs approximately 70,000 people worldwide.

Conclusion of Mission-Driven Growth

TSMC's focus on customer collaboration, technology innovation, and sustainability underpins its mission statement, driving the company towards its goal of remaining the foremost semiconductor foundry globally.

How Taiwan Semiconductor Manufacturing Company Limited (TSM) Works

Business Model

Taiwan Semiconductor Manufacturing Company Limited (TSMC) operates a pure-play foundry model, focusing exclusively on semiconductor manufacturing for various customers, including fabless companies and integrated device manufacturers. In 2022, TSMC reported total revenue of $75.9 billion, with a net income of $25.3 billion.

Manufacturing Process

TSMC utilizes advanced manufacturing technologies to produce semiconductors. The company has made significant investments in R&D, dedicating around $3.9 billion in 2022, accounting for approximately 5.1% of its revenue.

The production process includes:

• Front-end manufacturing
• Wafer fabrication
• Back-end assembly and testing

Technology Nodes

TSMC is a leader in cutting-edge technology nodes. As of 2023, TSMC had introduced:

• 5nm process technology, with volume production commencing in 2020
• 3nm process technology, expected to ramp up in 2023

Approximately 60% of TSMC's revenue in 2022 came from 7nm and below technologies.

Customer Base

TSMC serves a wide range of clients including:

• Apple: $23 billion in revenue from TSMC in 2022
• NVIDIA: $11.8 billion in revenue in 2022
• Qualcomm: $8.4 billion in 2022

In 2022, approximately 30% of TSMC's revenue was derived from the top customer, Apple.

Financial Performance

The following table summarizes TSMC's financial performance for the fiscal year ending December 31, 2022:

Global Presence

TSMC has a significant global footprint. As of 2023, TSMC operates:

• 15 advanced manufacturing facilities in Taiwan
• 2 facilities in China
• 1 facility in the United States (Arizona, expected completion in 2024)

TSMC's international expansion strategy is aimed at diversifying its manufacturing capabilities and mitigating risks related to geopolitical tensions.

Sustainability Initiatives

TSMC is committed to sustainability and has set goals to reach net-zero emissions by 2050. As part of this initiative, the company aims for:

• 100% renewable energy usage in its global operations by 2040
• Water recycling rates of over 90% in its fabs

Market Position

As of 2023, TSMC held approximately 53% of the global semiconductor foundry market share, making it the largest player in the industry. The second-largest competitor, Samsung, held around 17% market share.

Future Developments

Looking ahead, TSMC plans to invest approximately $40 billion in capital expenditures for the years 2022-2024, focusing on expanding its advanced manufacturing capabilities and increasing production efficiency.

How Taiwan Semiconductor Manufacturing Company Limited (TSM) Makes Money

Revenue Streams

TSMC primarily generates revenue through the manufacturing of semiconductor products for various clients across different industries.

• Foundry Services
• Advanced Technologies
• Wafer Fabrication

Key Clients and Their Contributions

Major customers include companies like Apple, AMD, NVIDIA, and Qualcomm. In 2022, TSMC generated approximately 56% of its revenue from its top 10 customers.

For instance:

Financial Performance

TSMC’s revenue for the year 2022 was approximately $75 billion, marking a 30% increase from 2021.

Operating income for the same period was around $31 billion, translating to a net profit margin of approximately 41%.

Technological Advancements

TSMC leads in advanced manufacturing technologies, primarily in the 5nm and 3nm nodes, which are pivotal for high-performance computing and mobile applications.

Investments in R&D were approximately $3.7 billion in 2022, representing about 5% of total revenue.

Geographical Distribution of Revenue

TSMC’s revenue is also significantly influenced by geographical factors, with substantial income coming from different regions:

Future Outlook

Projected revenue for 2023 is estimated to be in the range of $85 to $90 billion, with expected growth driven by increasing demand for AI, 5G, and IoT technologies.

Additionally, TSMC is planning capital expenditures between $36 to $40 billion for 2023, focusing on expanding production capacity and enhancing technology nodes.