TSMC (Remastered)

1. BGBen Gilbert0:00

   Hello, Acquired listeners! We regularly get feedback that this episode on TSMC, the Taiwan Semiconductor Manufacturing Company, is one of the best Acquired episodes ever. And interestingly, it predates our Nvidia episodes. We did it way back in 2021, when the Acquired audience was about twelve percent the size of what it is today, which means that the vast majority of you have never heard it. So, uh, we definitely wanted to fix that. Since then, semiconductors have become so much more important in our world, and TSMC has essentially become the only manufacturer of the leading-edge chips. They make the primary chip inside every MacBook and iPhone shipped today. They're powering the AI wave, manufacturing all of Nvidia's chips. They make the chips for a whole bunch of other fabless companies like Qualcomm, AMD, Broadcom, and hyperscalers like AWS.

2. DRDavid Rosenthal0:55

   And it turns out they even manufacture a lot of chips-

3. BGBen Gilbert0:58

   [chuckles]

4. DRDavid Rosenthal0:58

   -for Intel, too.

5. BGBen Gilbert1:00

   Yes.

6. DRDavid Rosenthal1:00

   Little-known fact. Yeah, TSMC rode the smartphone era to crazy heights, as we all know, and here now in the next AI era, here in 2025, it turns out that they are the manufacturing superpower behind all of that, too.

7. BGBen Gilbert1:14

   Yep. Well, listeners, without doing too much foreshadowing, now is a very good time for anyone to listen or re-listen to the TSMC episode, so we decided we should go all the way back to the raw audio tracks and remaster this whole thing from scratch for your listening pleasure.

8. DRDavid Rosenthal1:32

   Ben, in fact, I looked it up since we were going back to 2021 when we initially recorded this, TSMC's market cap has doubled since then, from five hundred and fifty billion to over a trillion dollars. And in fact, you're the one that tipped me off to this as we were re-researching here. They and Saudi Aramco are the only trillion-dollar companies in the world that are not located on the West Coast of the United States. Wild.

9. BGBen Gilbert1:58

   This is such a crazy stat. It's crazy that the rest are located on the West Coast of the United States, but it really underscores what a extreme outlier TSMC is. So without further ado, the story is truly unbelievable, and we hope you enjoy this presentation of TSMC Remastered.

10. SPSpeaker2:14

    Who got the truth? Is it you, is it you, is it you? Who got the truth now? Is it you, is it you, is it you? Sit me down, say it straight, another story on the way. Who got the truth?

11. BGBen Gilbert2:31

    Welcome to season nine, episode three of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I am Ben Gilbert.

12. DRDavid Rosenthal2:40

    And I'm David Rosenthal.

13. BGBen Gilbert2:42

    And we are your hosts. Today's episode is on TSMC, or the Taiwan Semiconductor Company. It is your classic, "Most people have never heard of it, but it's the ninth largest company in the world" episode.

14. DRDavid Rosenthal2:55

    This is wild. Morris Chang founded TSMC at age fifty-six, retired at seventy-four, then came back at age seventy-eight, inked the deal to make all of Apple's chips, and... yeah, we're gonna tell the whole story here. It's wild.

15. BGBen Gilbert3:10

    It's nuts. They make literally every chip in every iPhone sold today, and soon to be in every Mac sold. If you're excited at all about Nvidia, AMD, Qualcomm, or even any of the chips that Amazon, Microsoft, Facebook, Apple are making, all of those chips, or nearly all of them, are actually made by TSMC, along with all the chips in your cars and your smart home devices and fighter jets and everything. Unbelievably, this company that the entire world relies on is on an island that some countries feel is a sovereign nation, and the People's Republic of China feels is actually theirs. So today's episode has it all, ascending from startup to tech superpower, an underdog founder, and of course, a good dose of geopolitics.

16. DRDavid Rosenthal3:56

    Indeed.

17. BGBen Gilbert3:58

    All right, well, listeners, it finally felt like the right time to do this episode amidst this global chip shortage that we've got going on, that, David, I think I've heard even Ford has paused the production of F-150s because of this. So it is, like, a massive impact on the world, and we've had TSMC on the agenda to do for, like, two and a half years now-

18. DRDavid Rosenthal4:17

    Yeah

19. BGBen Gilbert4:17

    ... in our little Google doc.

20. DRDavid Rosenthal4:18

    Totally. Well, I feel like we haven't called it a miniseries, but let's call it a miniseries on semiconductors and, like, silicon.

21. BGBen Gilbert4:25

    The Arm episode...

22. DRDavid Rosenthal4:26

    Yep. Sequoia part one, PA Semi.

23. BGBen Gilbert4:29

    Yep. Okay, listeners, it is time to jump into the history and facts, and David's gonna lead us in that. But as usual, even though we're gonna be probably very excited about some companies, less excited about other companies, this show is not investment advice. We may have investments in the companies we discuss. It's for entertainment and informational purposes only, and you should do all of your own research.

24. DRDavid Rosenthal4:51

    Okay, speaking of, we start in Ningbo, China, in July 1931, just about one year after Warren Edward Buffett was born in Omaha, Nebraska. And there are gonna be quite a few parallels here as we go through this episode. But in July 1931, in Ningbo, China, our protagonist, Dr. Morris Chang, Order of the Propitious Clouds with Special Grand Cordon, which is the highest civilian honor that anyone in Taiwan can hold.

25. BGBen Gilbert5:24

    Sweet.

26. DRDavid Rosenthal5:24

    So he's like a knight of Taiwan. It's the Order of Propitious Clouds, and then I think there's, like, nine ranks of it, and the highest is Special Grand Cordon.

27. BGBen Gilbert5:33

    And he's Special Grand Cordon?

28. DRDavid Rosenthal5:34

    He's special. Yes, he's very special. [chuckles] So he was born then. For those who are unfamiliar with Chinese geography, Ningbo is a small city, just a bit south of Shanghai. You know, small. It's about eight million people, just casual, no big deal.

29. BGBen Gilbert5:49

    China's scale is ridiculous, but certainly wasn't eight million people when Morris was born in 1931.

30. DRDavid Rosenthal5:53

    No, but I bet it was still probably pretty big. But yeah, today, eight million people. Crazy. So Morris's father was a county official and later became a bank manager.... So the family moved around a good bit within China as his father was transferring for work. This is pre-People's Republic of China. This is pre-World War II. This is a very different place.

Episode duration: 2:27:49