TSMC was founded in 1987 by Morris Chang to specialize in contract semiconductor manufacturing.
Taiwan Semiconductor Manufacturing Company created the dedicated foundry model: it manufactures chips designed by other companies rather than selling mainly its own branded processors. This separation allows customers such as fabless chip designers to use advanced production technology without building their own fabrication plants.
The company was established in Hsinchu, Taiwan, with support from the Taiwanese government and Philips. Its manufacturing expertise became especially important as chip designs grew more complex and production required extraordinarily expensive facilities.
TSMC is often confused with a chip-design company such as Qualcomm or Nvidia. Those firms design important processors, while TSMC primarily manufactures chips for customers. Its scale and advanced process technology have made it one of the most valuable companies in the world by market capitalization.