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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesTSMC, or Taiwan Semiconductor Manufacturing Company, is a chip foundry: it manufactures semiconductors designed by other companies. Taiwan matters because it is home to most of TSMC’s manufacturing footprint and a highly concentrated share of advanced chipmaking capacity. That makes Taiwan a critical part of global technology supply chains—and a point of exposure if production there is disrupted.
What is TSMC?
TSMC is a semiconductor manufacturer that specializes in making chips for other companies. Those customers design chips; TSMC provides the fabrication processes and production capacity to manufacture them. The company calls this a pure-play foundry model and says it does not design, manufacture, or market semiconductor products under its own name.
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That distinction helps explain why most consumers do not encounter TSMC as a retail brand. A chip made by TSMC may be part of a phone, server, car, or other product sold under another company’s name. TSMC is an upstream supplier rather than the maker of the finished device.
What kinds of chips and markets are involved?
TSMC says its manufacturing serves high-performance computing, including data-center and server demand, as well as smartphones, the Internet of Things (IoT), automotive, and digital consumer electronics. Its 2024 annual report describes foundry demand as closely tied to the health of these major end markets. That is the company’s characterization of its business, not an independent forecast.
How large is TSMC’s manufacturing capacity?
TSMC’s 2025 report says facilities managed by the company and its subsidiaries had more than 17 million 12-inch-equivalent wafers of annual capacity in 2025. This is a company-reported capacity measure across those facilities; it is not the number of wafers actually shipped, TSMC’s share of worldwide production, or a measure of finished chips sold.
Why does Taiwan matter to the global chip supply?
A large share of advanced production is concentrated there
Taiwan’s importance is not that it makes every chip. It is that a particularly important portion of advanced fabrication is concentrated on the island, alongside a broad semiconductor ecosystem. The U.S.-China Economic and Security Review Commission’s 2025 report says that in 2022 Taiwan held 69% of global fabrication capacity capable of producing chips below 10 nanometers, while South Korea held 31%.
Those figures have a narrow definition and a specific date: they describe 2022 capacity capable of making sub-10nm chips. They are not a 2026 snapshot, a share of all semiconductor output, or a TSMC-only statistic.
The wider ecosystem extends beyond wafer fabrication
Chip supply chains involve more than the factory step. The Congressional Research Service describes Taiwan’s participation in design, fabrication, materials, and assembly, packaging, and testing. These stages are connected, so disruption or constraints in one part of the ecosystem can affect companies that depend on other parts as well.
The U.S. International Trade Administration’s 2025 Taiwan country guide estimates that Taiwan accounts for over 60% of global foundry revenue and more than 90% of leading-edge chip manufacturing. These are guide-level estimates with their own definitions. They should not be read as TSMC’s individual market share, and they should not be blended with the Commission’s 2022 sub-10nm capacity figures: the measures and scopes differ.
TSMC is central, but it is not the whole supply chain
TSMC’s size and role make it a major part of Taiwan’s manufacturing footprint, but Taiwan’s chip industry is broader than one company or one fab. Likewise, other countries and companies contribute to semiconductor production. The practical concern is concentration in particular capabilities and locations, not a claim that one company makes all chips or that Taiwan supplies every market.
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How is TSMC expanding production outside Taiwan?
TSMC’s manufacturing footprint is international, but it remains strongly rooted in Taiwan. Its 2025 report lists major Taiwan fab operations and facilities or subsidiaries in Arizona, Nanjing, and Japan. The report says the first Arizona facility began 4nm volume production in the fourth quarter of 2024, and the first Kumamoto fab in Japan began volume production at the end of 2024.
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These milestones show that overseas production is underway, not that the company has moved its manufacturing base out of Taiwan. TSMC’s report also discusses projects in development or planned for the future. Announced, under-construction, or planned facilities should not be counted as current volume production.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What does Taiwan’s concentration mean for supply risk?
When important production capabilities are concentrated in one location, customers and downstream industries become exposed to events that could interrupt that location’s operations. The Congressional Research Service discusses possible disruption risks involving trade, geopolitical conditions, and other factors. A disruption affecting Taiwan’s semiconductor ecosystem could therefore affect companies and industries that rely on its output.
This is a vulnerability assessment, not a prediction that a particular crisis, blockade, shutdown, or supply interruption will occur. The evidence supports identifying concentration as a resilience concern; it does not establish that a specific event will happen or specify its outcome.
What diversification can—and cannot—do
More production in multiple locations can reduce reliance on a single geography, but capacity takes time to establish, and different factories do not necessarily make interchangeable chips. A useful comparison asks which chip segment a facility serves, what measure is being compared, who operates the facility, and whether it is already producing at volume or is still planned. Without those distinctions, a list of new fabs can give a misleading impression of how quickly supply dependence is changing.
How to interpret claims about Taiwan’s chip share
Numbers about Taiwan’s role can sound contradictory when they describe different things. Before comparing them, check the measure and its scope:
- Foundry revenue measures revenue attributed to foundry services, not the physical share of all chips made.
- Fabrication capacity describes potential manufacturing capability; it is not necessarily actual output or shipments.
- Technology threshold matters: a statistic about sub-10nm or leading-edge production does not describe mature-node chips or the whole semiconductor market.
- Geography and operator are different: a fab’s location does not by itself say which company runs it or where its customers are based.
- Date and status matter: a dated capacity estimate and a facility already in volume production cannot be treated as a current figure for all announced projects.
For example, the Commission’s 69% figure is specifically Taiwan’s share of sub-10nm fabrication capacity in 2022. The Trade Administration guide’s over-60% figure is an estimate of Taiwan’s share of global foundry revenue. They answer different questions and should remain separate.
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