TSMC
Strategic Concepts & Mechanics
Primary Evidence
"Many of the United States’ most storied companies have been ailing. Detroit’s automakers, having limped along for decades, are now stumbling through the transition to electric vehicles. US Steel, General Electric, and IBM are shadows of their past selves. Intel, mired in cycles of blown product timelines and layoffs, went from a semiconductor trailblazer to a clear laggard behind Taiwan’s TSMC. After two of Boeing’s 737 MAX jets crashed in 2017, the company promised strenuous efforts to guarantee the safety of its aircraft. Then a door blew off midair in 2024. Boeing, like Intel, is constantly delaying the launch of long-planned products."
"Schumpeter’s words can indeed be borne out by Taiwan’s economic development over the past half century. Mr. Wang Yung-ching of the Formosa Plastics Group represents the takeoff era’s need to pay attention to every detail of management; Mr. Zhang Zhongmou of TSMC represents the grand strategy and outstanding talent displayed in the high-tech era."
"As Cupertino attempts to diversify to India for manufacturing, TSMC is in the process of diversifying chip fabrication to the United States, with direct aid from Washington. In May 2020, TSMC announced a major investment to build an advanced semiconductor fabrication facility, or fab, in Phoenix, Arizona, and by 2024 the plans had expanded to include three new fabs for a total cost of more than $65 billion, underscoring pressure from its customers and the seriousness of Washington’s efforts. The three fabs will be the “largest foreign direct investments in a greenfield project in US history,” TSMC says. However, amid reports of culture clashes and a shortage of American talent to fill 6,000 planned roles, the start of production was delayed by a year to early 2025."
"There are signs that Warren Buffett, Apple’s biggest single investor, *is* nervous. In early 2023 he sold his stake in TSMC, worth nearly $5 billion, citing geopolitical risks. Buffett called the Taiwanese chipmaker “one of the best managed and important companies in the world,” but added: “I don’t like its location, and I reevaluated that.” Then, between August and November 2024, Buffett slashed his stake in Apple from $178 billion to $69.9 billion, a reduction of nearly two-thirds. The moves went unexplained, but the logic behind his sale of TSMC stock is just as valid for Apple."