In this interview, Saxony’s minister president talks about his impressions of his trip to Asia and the lessons learned from the TSMC project in Dresden.
By Fabian Peltsch
Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest contract manufacturer of semiconductors and plays a central role in the technology industry. With production critical to some of the world's largest technology companies, TSMC is often at the center of global economic and geopolitical discussions. TSMC produces chips for companies such as Apple, Nvidia and AMD, and the company's importance continues to grow in an increasingly digitalized world. TSMC in Taiwan: The heart of chip production TSMC has its headquarters and most of its production facilities in Taiwan. The factories, also known as "fabs", are state-of-the-art facilities that produce some of the world's most advanced semiconductor chips. These chips are at the heart of many modern technologies, from smartphones to computers to autonomous vehicles. How many TSMC factories are there? TSMC operates a total of over 10 fabs in Taiwan, including the so-called GigaFabs, which are capable of producing an enormous amount of semiconductors. How many employees does TSMC have? The company employs around 65,000 people worldwide, the majority of whom work in Taiwan. Who is TSMC's biggest competitor? The competition for TSMC is tough, especially from the USA and South Korea. The company's biggest competitor is Samsung, which is also a leading manufacturer of semiconductors. TSMC also competes with GlobalFoundries and Intel, although these companies cannot currently produce the most advanced chips that TSMC offers. TSMC and its global customers Who manufactures at TSMC? Many of the world's leading technology companies have their chips manufactured by TSMC. Apple, Nvidia and AMD are some of the major customers that rely on TSMC's advanced manufacturing processes. The success of these companies, particularly in the areas of smartphones, computers and graphics cards, depends largely on TSMC's ability to produce ever smaller and more powerful chips. TSMC shares: Performance and investors How valuable is TSMC? TSMC shares are one of the most valuable semiconductor stocks in the world and have been particularly attractive to investors in recent years. With a market value of over 400 billion US dollars, TSMC is one of the most valuable companies in the world. Warren Buffett, one of the most successful investors of all time, acquired shares in TSMC through his investment company Berkshire Hathaway in 2022. However, he sold the majority of these shares in 2023, triggering speculation about his assessment of the geopolitical risks surrounding Taiwan and China. TSMC shares were subject to fluctuations in 2023, which can be attributed to several factors. On the one hand, geopolitical tensions between Taiwan and China are influencing investor sentiment. On the other hand, there have been production bottlenecks and supply problems due to the global semiconductor shortage, which have impacted share prices. Nevertheless, TSMC remains a profitable company, with annual profits in the double-digit billion range. Global expansion plans: TSMC in the USA, Germany and Japan Where are TSMC's production facilities located? TSMC is increasingly expanding outside Taiwan to diversify its production capacity and minimize geopolitical risks. In the USA, TSMC is investing heavily in the construction of a new chip factory in Phoenix, Arizona. This factory will be used for the production of advanced 5-nanometer chips, which are of central importance for modern smartphones and computers. TSMC has announced plans to invest a total of around 12 billion US dollars in this site. However, there are reports of delays in construction and difficulties in finding qualified personnel, which could affect the completion of the factory. TSMC is also planning a significant expansion in Europe. In 2023, it was announced that TSMC is considering building a chip factory in Dresden, Saxony. This factory could play a central role in supplying the European automotive industry with semiconductors, as the demand for chips for electric vehicles and autonomous systems is steadily increasing. TSMC is expected to receive strong support from the German automotive industry, as companies such as Bosch and Infineon could also benefit from local chip production. TSMC is also expanding its production capacities in Japan. In cooperation with the Japanese electronics group Sony, TSMC is building a new factory there, which is expected to go into operation in 2024. This partnership shows how important it is for TSMC to diversify its production globally. TSMC and the geopolitical tensions between Taiwan and China Taiwan, where the majority of TSMC's factories are located, is at the center of geopolitical tensions between China and the West. China regards Taiwan as a renegade province and has repeatedly made it clear that it seeks reunification with Taiwan, including by military means if necessary. The strategic importance of TSMC to the global technology industry has made Taiwan a geopolitical flashpoint. Western companies' dependence on TSMC's advanced chip production increases concerns that a conflict between China and Taiwan could jeopardize global technology supplies. Although TSMC also has factories in China, these are mainly used for the production of less advanced chips. The high dependence of the global technology industry on TSMC's Taiwanese factories highlights the risks that a conflict in the region could entail. TSMC and the EU:Cooperation with European companies TSMC cooperates closely with European technology companies such as Bosch, Infineon and NXP. This cooperation is particularly important for the automotive industry, as TSMC's chips are used in electric vehicles and autonomous driving systems. The joint ventures and partnerships in Europe are evidence of the strategic importance TSMC attaches to the European market. Conclusion and outlook for the future of TSMC TSMC remains a key player in the global semiconductor industry and continues to attract the attention of investors, companies and governments worldwide. With production facilities in Taiwan, the US, Europe and Japan, TSMC is diversifying its capacity to meet the global demand for advanced chips. Despite geopolitical challenges and competition from companies such as Samsung and Intel, TSMC remains a leader in semiconductor technology. The coming years will show how the company realizes its expansion plans while managing the risks of the geopolitical situation. The Table.Briefings editorial team reports on what's next for Taiwan Semiconductor Manufacturing Company and has all the TSMC news, analysis and background on the subject.
