A Deep Dive in How TSMC Won Its Place in Global Semiconductor Industry

Why Trump’s Accusation Against Taiwan’s Semiconductor Industry Misses the Point

There’s a well-known Chinese saying: “欲加之罪, 何患無辭,” which translates to, “If you want to accuse someone of a wrongdoing, there’s no shortage of excuses.” This sentiment seems to describe President Donald Trump’s recent accusations, claiming that Taiwan has “stolen” semiconductor business from the U.S.

If Trump’s purpose for that statement is to get chips produced in America, TSMC is already doing it, and accelerating their progress to have advanced chips produced in Arizona.

However, if we step back and analyze the situation, Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Company) should simply respond with: "If the U.S. wants Intel to grab orders from companies like Nvidia, AMD, and Qualcomm, then so be it." In reality, many companies that initially turned to Samsung for semiconductor manufacturing eventually returned to TSMC. Despite TSMC’s higher service fees, companies found its technology and reliability unmatched. Perhaps President Trump should ask these companies why they returned to TSMC, even Intel why it also outsources chips to TSMC.

In this article, I’ll explore insights from TSMC founder Morris Chang’s memoir and Hong-wen Lin’s 晶片島上的光芒 to show that TSMC did not “steal” Intel’s business. Instead, Intel’s decline can be attributed to its own failure to advance its manufacturing capabilities, allowing competitors to gain ground. Stay with me to understand why this is not about “stealing,” but about evolution in a competitive, global industry.

The Fall of Giants: Disruption, Not Theft

When major companies fall, it's usually because they failed to adapt to new technologies or business models, not because other companies “stole” their business. This is what happened to Kodak with the digital camera, Nokia with the smartphone, and Intel with the “fabless vs foundry” division of labor.

Intel remains an impressive company with a storied history, but its struggles today are partly due to its missteps in the foundry business, which have distracted it from its core strengths—product development, marketing, and R&D. Intel’s strength has always been in design and innovation, not in manufacturing. Forcing Intel to return to its roots of 40 years ago could prove disastrous, just as asking a bird to dive underwater would be.

Intel may be a great company, but it’s not made for the foundry business. TSMC, on the other hand, was built to do exactly that, and it’s succeeding precisely because it focuses on manufacturing chips, leaving design to others.

TSMC Didn’t Steal Intel’s Business

Let's clear up the confusion: TSMC has succeeded due to its business model, which Intel rejected when it was first offered the chance to invest. If President Trump’s definition of "TSMC stealing business" is about attracting customers through superior service and technology, then Intel’s foray into foundries later might fit the traditional definition more.

Morris Chang’s memoir sheds light on the historical context behind TSMC’s rise. Intel was offered a chance to co-invest in TSMC, but they declined. Years later, Intel attempted to compete with TSMC in the foundry business but failed. Why? Simply put, Intel couldn’t keep up with TSMC’s innovations in manufacturing.

• Chapter 17, page 351: Morris Chang recalls how, in the early days, he reached out to Intel, hoping for a partnership. But after weeks of silence, Intel rejected the offer to invest in TSMC, not believing that a foundry-focused business model could succeed.

• Chapter 18, pages 355-356: TSMC’s commitment to being a dedicated foundry was key. Intel and others believed it was too risky, but TSMC proved them wrong.

• Page 370-371: TSMC’s capital-intensive, technology-focused model is different from Intel’s IDM model. Although TSMC’s process lagged 2-3 generations when the company was founded, its yields were high, and that reflected its solid engineering foundation.

• Page 386: TSMC got its first Intel outsourcing contract from Andy Grove. The first assignment was the production of microprocessors with the 1.5-um process, which was Intel’s old product. Intel wanted to dedicate their production resources to more advanced products, so they asked TSMC to do foundry for them.

• Here’s where the real story of how TSMC outperformed Intel becomes even more clear. In 2011, Intel tried to grab Apple’s chip business, but TSMC was already in the process of negotiating a contract. Tim Cook, Apple’s CEO, was far from impressed with Intel’s foundry capabilities. According to Morris Chang’s memoir, Tim Cook told him not to worry, because “They (Intel) are not good at doing foundry.” Apple had realized that TSMC's quality, cost-efficiency, and reliability made it the better partner for producing iPhone chips.

These facts show that TSMC did not “steal” Intel’s business; rather, Intel failed to embrace the future of chip manufacturing, which allowed TSMC to take the lead. Despite all that, TSMC and Intel remain partners. Intel depends on TSMC to shorten the time-to-market for its latest products. In the AI era, they need TSMC more than ever.

The True Competition: TSMC’s Innovative Rise

Morris Chang and Hong-wen Lin’s book 晶片島上的光芒 reveals how TSMC surged ahead of the competition, including giants like IBM, Intel, and Samsung.

Take the case of TSMC’s success with 0.13um process technology. While IBM chose to partner with UMC and others, TSMC opted to develop its own technology, ultimately beating IBM by two years.

In 2014, Samsung took the lead with 14nm FinFET technology. TSMC responded with Project Nightingale, a 400-person R&D initiative dedicated to shortening the learning curve for 10nm technology. By 2016, TSMC was mass-producing 10nm chips for Apple, taking the lion’s share of iPhone orders. Samsung’s chips faced issues like overheating, which helped TSMC dominate Apple’s chip orders.

Intel, on the other hand, struggled with its 10nm process and only began to make headway with its foundry capabilities after Pat Gelsinger returned as CEO in 2021. Despite that, Intel continued outsourcing to TSMC for chip production.

TSMC's Success is Built on Innovation, Not Theft

When we examine the facts, it's clear that TSMC didn’t “steal” business from Intel. TSMC succeeded because of its relentless innovation and ability to adapt to market demands. This is not a case of opportunistic “theft” but of strategic evolution and technological excellence.

Rather than focusing on accusations of “stealing,” we should celebrate TSMC’s success in driving global competition in the semiconductor industry. This benefits U.S. companies by improving the supply chain and encouraging further innovation. If the U.S. is serious about regaining a leadership position in semiconductors, it will need to embrace the lessons of adaptation, risk-taking, and technological progress that TSMC’s journey has exemplified.

If you have not read my previous article, please read it here:

It is a bad idea to request TSMC to bail out Intel Foundry Service in the form of a joint venture, just as I discussed in that article. Even if TSMC is to take a major stake in that venture, and rename it ASMC, people are already talking about incompatibility in the processing technologies of the two companies, let alone corporate cultures.

“The U.S. hasn't done manufacturing for many years, so manufacturing-related regulations, talent, and business environments aren't in place,” said Hong-wen Lin recently at the 2025 Taipei International Book Exhibition. “They (TSMC) spent tens of millions of dollars to hire experts to design 18,000 laws, regulations, and rules to help the local regulators build the infrastructure for a semiconductor ecosystem.”

It is understandable that President Trump is anxious in tightening controls on TSMC, given its critical role in strategic industries such as drones, defense, and AI. However, playing rogue to get what he wants is very “unAmerican”. Remember “forced technology transfer” was one of the reasons that created tension between the US and China before the Trade War started? Trump should not use the rival’s playbook on its allies.