Jennifer(Cheng-Chen) Lee Simmons
Taiwan Semiconductor Manufacturing Company (TSMC) is a Taiwanese multinational semiconductor manufacturing and design company located in Hsinchu Science Park, Taiwan. TSMC is the world’s largest semiconductor manufacturer. The Taiwan Industrial Technology Research Institute (ITRI)
Electronics Research and Service Organization (ERSO) launched a new R&D project to start focusing on Very Large-Scale Integration (VLSI) next generation semiconductor technology. ITRI started building a VLSI model factory as the R&D project was ramping up. The factory was finished in 1986 and Morris
Chang was hired to make the VLSI project a “billion-dollar VLSI plan" and a “pure foundry" and founded
TSMC as a joint venture between Taiwan Government (49%), Philips (27%), and private investors (24%). TSMC continued to grow and had multiple fabless customers from around the world including industry leaders like Nvidia, Qualcomm, Broadcom, and Intel.
Huawei Technologies Co. is a Chinese multinational technology corporation located in Shenzhen, China. Huawei is one of the leading designers and manufactures of telecommunications equipment,consumer electronics, and smart phones. After serving as the deputy director of the People’s Liberation
Army Engineering Corps, Ren Zhengfie founded Huawei in 1987 as a limited corporation with only 14 employees and five investors. Huawei continued to grow as it started investing more in R&D and building more advanced telecommunication infrastructures such as FMC, IMS, WiMAX, and IPTV. As
Huawei continued to grow, they began to internationalize in the 2000s and even started designing equipment with international standards. 2
Both the national governments supported the growth of TSMC and Huawei. The Taiwanese government constructed a VLSI factory in Hsinchu Science Park, contributed research and human capital from ITRI, and provided 49% join venture funding for TSMC. The Chinese government did not initially
help Huawei start, but did significantly help the growth of Huawei by initiating policies for limiting foreign imports for telecommunication infrastructure, providing grants for R&D, subsidized real estate, and large state-sponsored loans.
The CEOs of both TSMC and Huawei also played large roles in the growth of both companies.
Chang’s vision and strategy for TSMC to be a place of “pure foundry” pushed TSMC to success even greater than what Taiwan thought possible. Ren’s leadership and drive pushed Huawei to become a top provider of technology both domestically in China and internationally.
The growth of TSMC and Huawei also impacted the growth of Taiwan and Shenzhen. Taiwan was initially a country that provided assembling of household goods. The investments into Hsinchu Science Park helped Taiwan grow to be a leading producer of integrated circuits, semiconductors, and electronic technology. The growth of TSMC helped bring Taiwan into the global market. Shenzhen was initially asmall town and Chinese investments made Shenzhen one of the largest electronics manufactures in the world with multiple factories producing most of the worlds electronics today to include most personal computers and smart phones. The internationalization of companies in Shenzhen helped the city to grow and more companies like Huawei to thrive.
1 Shih, Willy & Wang, Jyun-Cheng. “Upgrading the Economy: Industrial Policy and Taiwan’s Semiconductor Industry", Harvard Business School (2010).
2 Zhang, YingYing & Kase, Kimio. “Huawei: A Silent Chinese Telecom Multination", IESE Business School University of Navarra: International Research Center on Organizations (2010).
3 Mcmorrow, Ryan. “Huawei a key beneficiary of China subsidies that US wants ended". Phys.ORG, AFP (2019)