TSMC's Six Core Competencies Why Are They Invincible?

In the global semiconductor manufacturing sector, TSMC (Taiwan Semiconductor Manufacturing Company) has maintained a leading position thanks to its unique business model, operational philosophy, and technological accumulation. Its innovative vertical disintegration business model separates chip design from manufacturing, positioning TSMC as an enabler in the industry and driving the development of the global semiconductor sector. By not competing with customers and closely serving them, TSMC has gained their trust and become the preferred partner for many tech giants. Additionally, TSMC's commitment to independent innovation and steady technological development has ensured a long-term technological advantage. These factors collectively make TSMC a leader in the global semiconductor manufacturing industry.
Is this true? Dear viewers! Welcome back to our channel! We are excited to engage with you and discuss today’s topic. As everyone knows, TSMC holds an absolute leadership position in chip manufacturing, with a stable market share of about 60%, while its largest competitor, Samsung Electronics, holds only 11%. As a dominant player in the industry, TSMC's core competencies include its business model, operational philosophy, technological accumulation, capacity management, ecosystem construction, and corporate structure, which are highly valuable references for peer companies.
Today, we continue to explore TSMC's core competencies by discussing the remaining three topics (Part 2). Let's get started:
Fourth Topic: Capacity - Emphasis on Layout, Allocation, and Overall Management
1. *Main Production Base in Hsinchu, with Backup Capacity*
TSMC's primary production bases are located in Hsinchu, Tainan, and Taichung, Taiwan. The Hsinchu Science Park serves as the main base, covering technologies from 450nm to 2nm. The Tainan Park focuses on mature nodes above 16nm and advanced nodes at 5nm and 3nm, while the Taichung Park handles mature 28nm nodes and advanced 7nm nodes. These regions complement each other to ensure comprehensive technological coverage.
2. *Clustered Capacity Distribution with Flexible Regional Allocation*
TSMC adopts a strategy of building super-large wafer fabs in clusters and continuously expanding them after selecting a site, reducing average costs and achieving economies of scale. Examples include the Fab18 plant in Southern Taiwan Science Park and the Kumamoto plant in Japan. TSMC's core factories in Taichung, Hsinchu, and Tainan can flexibly allocate capacity and engineers.
3. *Cloud-based Automated Capacity Management*
TSMC's assets increase yearly, necessitating improved management efficiency to maintain core competitiveness. Despite factory expansions, the number of employees remains around 40,000, with high salary levels. Cloud-based automated management is key to improving efficiency, connecting existing and new factories through cloud systems, enabling cross-factory collaboration, and enhancing capacity utilization. For instance, factories with insufficient capacity can share production data with other factories via the cloud for production or use other factories' machines to verify local production processes.

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Human resources remains the prime mover of all success.
That's why all countries in the world are trying their best to rope in the best talents.
At one time in the past the USA was most successful in this effort...but no more now.