TSMC created the modern semiconductor foundry model used by many chip designers. Founded by Morris Chang in 1987, Taiwan Semiconductor Manufacturing Company built a business around manufacturing chips designed by other firms.
Before the foundry model became influential, many semiconductor companies designed and manufactured their own chips. TSMC instead offered fabrication capacity as a service, enabling fabless companies to concentrate on architecture, software, and product development.
This model helped companies such as Nvidia, Qualcomm, and MediaTek avoid the enormous expense of building and operating advanced fabrication plants. TSMC’s customers still own their designs and brands; TSMC manufactures physical chips according to their specifications.
The foundry model is different from integrated device manufacturers, which generally design and manufacture their own semiconductors. TSMC’s scale, process technology, and customer base helped make it one of the world’s largest companies by market capitalization.