Taiwanese chipmaker TSMC: the most important company few people have

When Li Ta-sen was a little boy, he used to walk to school through fields of sugarcane taller than himself. Some 40 years later, he is making a living by selling off the same fields as a property boom takes hold in his hometown of Shanhua.

The reason for the construction frenzy in the once shabby rural town in southern Taiwan is simple: the arrival of the world’s most advanced chip factory.

Taiwan Semiconductor Manufacturing Company, the largest contract chipmaker in the world, is building a plant to make chips with transistor gates only 3 nanometres long, which will be used in devices from smartphones to supercomputers.

“Prices for the adjacent agricultural land tripled last year, and we had the highest transaction volume in our 10-year history,” says Li, who runs the local branch of real estate broker Century 21, and has watched TSMC engineers snap up newly-built apartments and town houses.

But the impact of TSMC’s new fabrication plant, or “fab”, radiates far beyond southern Taiwan. In the world of semiconductors, this is the centre of the universe.

The plant, due to start mass production next year, will use process technology which so far only TSMC and South Korea’s Samsung Electronics have mastered — at present, the most advanced chips are 5nm. The new chips bring huge advantages for customers: the smaller the transistors on a chip, the lower the energy consumption and higher the speed.

Measuring 160,000 square metres, the size of 22 football fields, the plant is commensurate with TSMC itself: a hulk with a stranglehold on global semiconductor manufacturing.

Normally a low-key company, TSMC’s massive investment in cutting-edge technology and growing influence are quietly drawing it into the limelight.

At a time when a global chip shortage has forced slowdowns or even suspensions of car production from Japan to Europe and America, and with politicians in many of countries making noises about bringing more manufacturing onshore, the Taiwanese company’s dominant position in global chip production is attracting attention.

Given that China retains a standing threat of invasion of Taiwan, the country has long been at the centre of the military rivalry between Washington and Beijing in east Asia. But it is also increasingly being caught up in the technological competition between the two superpowers.

China’s companies have been unsuccessful in their bid to match TSMC’s manufacturing prowess, but the US has also started to struggle: Intel is set to outsource some production of processors, its crown jewel, to the Taiwanese company. In Washington, the Pentagon has been quietly pressing for the US to invest more in advanced chipmaking, so that its weapons are not dependent on foreign manufacturers.

All of that makes TSMC possibly the most…