Semiconductor History | 台積電's First 98 Employees — The Company That Agreed Not to Compete With Its Customers

When 台積電 was founded in February 1987, ITRI handed it a building, the equipment inside it, the process, and ninety-eight people.

That is the honest version of the founding, and it is better than the myth. TSMC did not appear in Hsinchu Science Park fully formed; it was spun out of a government laboratory, from the six-inch VLSI pilot fab that had opened there in 1986.

Morris Chang (張忠謀) had arrived from Texas Instruments in 1985 to run 工研院, invited back by 孫運璿 among others, and the foundry was the idea he brought with him.

The proposition was a refusal rather than an invention.

Every other chip company designed and sold its own products, so any customer handing over a design was handing it to a competitor. TSMC would fabricate for anyone and compete with nobody, and that promise — not a process advantage — is what created the pure-play foundry.

The consequence was that a chip company no longer needed a fab.

Philips came in as the cornerstone foreign partner with a technology licence, the Executive Yuan's development fund anchored the state's share, and private Taiwanese groups took the rest. The exact percentages circulate in several forms and are not worth printing without a primary source.

What the model did to the industry is easier to state than the cap table.

Qualcomm, Broadcom, NVIDIA, MediaTek and hundreds of others exist in their current form because someone else owned the fab, and 蔡明介, who had trained at RCA in New Jersey in 1976, took MediaTek out of UMC in 1997 into a market TSMC had made possible.

Ninety-eight people is the number to hold onto.

The pin here is ITRI in 竹東, where the company began, rather than the headquarters it built later at 力行六路 in the science park. The park is where it grew; this is where it started.

Photo: Peellden, CC BY-SA 3.0, via Wikimedia Commons (TSMC's Fab 5 building in Hsinchu Science Park — a later plant, not the ITRI pilot fab, which is where the company actually began).