Taiwan Semiconductor Manufacturing Company is the unrivaled leader of the global semiconductor industry, holding around 70 percent of the world’s foundry market share. Within that, the company’s 3-nanometer process currently accounts for roughly a quarter of total revenue. TSMC’s decision to set up 3-nanometer production in Taiwan rather than the United States in 2017 traces back, at least in part, to one meeting that has only now been publicly described.
TSMC stock hits a record high on the AI boom
Driven by global AI demand, TSMC’s share price climbed to a new record of 2,040 New Taiwan dollars within two hours of the market opening on April 14, 2026, pushing the company’s market capitalization to NT$52.9 trillion. Morris Chang, who founded TSMC and retired in 2018 when shares were trading at NT$229, has seen the value of his holdings rise to roughly 8.9 times the price at which he stepped down. According to Forbes, Chang’s net worth has climbed from $4.1 billion to $8.4 billion, or about NT$270 billion.
Under Chang’s leadership, TSMC pushed its way into the world’s top ten companies by market value and built a near-monopoly on the most advanced chipmaking technology. The company is indispensable to the global semiconductor supply chain and supplies Apple, Nvidia, Google, MediaTek, AMD, and OpenAI, among others. Its weight in Taiwan’s economy, and its role in deterring a Chinese Communist Party invasion of the island by making any disruption to TSMC catastrophic for the global economy, have earned it the nickname “the sacred mountain that protects the nation,” a phrase rendered in international coverage as Taiwan’s silicon shield.
Who founded TSMC and how the Taiwanese government built it
TSMC was founded in 1987 with active backing from the Taiwanese government, which had been preparing the ground for more than a decade. As far back as 1973, Taipei established the Electronics Industry Research and Development Center within the Industrial Technology Research Institute, with the Ministry of Economic Affairs putting up $10 million for an RCA technology transfer program to develop integrated circuits.
The company’s creation was inseparable from the work of Li Kwoh-ting, then convener of the Cabinet’s Applied Technology Development Group. In 1986, Li invited Morris Chang, then chief operating officer of the U.S. company General Instrument, to come to Taiwan to head the Industrial Technology Research Institute. With Premier Sun Yun-suan and Li both pushing the project, the government lined up the talent, capital, land, legislation, and supporting infrastructure. The new company was set up as a spinoff carrying technology transferred out of ITRI, structured as a joint venture with Royal Philips of the Netherlands, the Taiwanese conglomerate Formosa Plastics, and other investors. It was named Taiwan Semiconductor Manufacturing Company, with Morris Chang as its first chairman.
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How TSMC’s overseas expansion changed Taiwan’s silicon shield
TSMC’s overseas expansion shifted the company from a Taiwan-only manufacturer to a globally distributed one, complicating the geopolitical calculation behind the silicon shield. By the end of 2015, TSMC had become the world’s largest logic IC manufacturer, with monthly capacity of 1.89 million 8-inch equivalent wafers. The company’s market capitalization passed that of IBM in 2016 and Intel in 2017.
In a speech, Morris Chang said TSMC’s success was inseparable from the people of Taiwan, and that the company itself was something the island needed to protect and value. Geopolitical risk and customer pressure changed the picture. In 2020, TSMC began building plants in Europe and the United States, marking the company’s transition from “made in Taiwan” to globally distributed production.
In an October 2025 investor briefing, current TSMC chairman and chief executive C.C. Wei said the company would acquire two large parcels of land near its existing site in Arizona to support an expansion plan. TSMC has committed to investing $165 billion in Arizona to build six fabs, two advanced packaging plants, and a research and development center, building the Arizona site out into a self-contained gigafab cluster capable of supporting customers in smartphones, AI, and high-performance computing, and making the site one of the largest foreign direct investments in U.S. manufacturing.
The 2017 meeting that kept TSMC’s 3-nanometer line in Taiwan
The 3-nanometer process is the strategic pillar that anchors TSMC’s global lead, drives long-term revenue growth, and meets surging demand from AI and high-performance computing. With 3-nanometer demand now far outstripping supply, C.C. Wei has said TSMC will expand 3-nanometer production at the Tainan Science Park, in Arizona, and at its plant in Kumamoto, Japan. The production line that today drives a quarter of the company’s revenue almost ended up being built in the United States in 2017.
In November 2016, Donald Trump won the U.S. presidential election, with bringing manufacturing back to the United States as one of his core campaign positions. TSMC at that point had not announced plans to build in the U.S. At the company’s January 2017 investor briefing, Morris Chang told analysts he would not rule out building a plant in the United States, but doing so would require significant sacrifices from both TSMC and its customers. Concentrating production in Taiwan, he added, was a function of how well Taiwan did the work, not of how cheaply it could be done.
Two months later, Mark Liu, then TSMC’s co-chief executive, told a supply chain forum that, weighing all the relevant factors, the company would proceed with plans to build a 3-nanometer plant in the United States. That statement is what triggered the meeting.
Chen Liang-gi, now a chair professor of electrical engineering at National Taiwan University and at that time newly installed as Taiwan’s science and technology minister, sat down with Morris Chang and made the case for keeping 3-nanometer production at home.
According to a report by the Taiwanese outlet Storm Media, Chen described the episode publicly on April 13, 2026, while delivering the keynote at the “2026 K.T. Li AI Semiconductor Innovation Forum,” jointly organized by the Monte Jade Science and Technology Association and the K.T. Li Foundation. Chen’s speech, titled “Taiwan’s Tech Industry Strategy in the Face of AI Expansion,” disclosed that he had taken the cabinet post in 2017 specifically to talk Morris Chang out of moving 3-nanometer production overseas.
Chen recalled telling Chang that the AI era was already arriving, that AI would absolutely require process technologies at 3 nanometers and below, and that if TSMC missed the wave, the 3-nanometer business would go to a competitor. He recalled his own framing of the assignment: he had been ordered into the science ministry as a firefighter, with this single problem to solve. He promised Chang that the government would prepare the domestic site for the new fab so the line could stay in Taiwan, and on that basis TSMC went on to build its 3-nanometer fab inside a Taiwanese science park, with adequate water and power, delaying the move to U.S. production by years.
What TSMC’s 2025 results mean for the next AI cycle
TSMC’s 2025 financial performance shows why keeping 3-nanometer production in Taiwan paid off. For all of 2025, the company reported revenue of $122 billion, up 35.9 percent year on year, with adjusted earnings per share rising 46.4 percent and gross margins approaching 60 percent. TSMC expects 2026 revenue to grow another 30 percent, to $158 billion.
With AI demand still climbing, advanced process capacity is likely to remain in shortage for at least the next three years. TSMC’s strategy from here is built around AI demand pulling the most advanced process nodes forward, sustained leadership in advanced packaging, and a globally distributed production base anchored by 3-nanometer capacity in Taiwan.
