At the heart of the graphic card, the actual GPU chip is manufactured in semiconductor fabrication plants (fabs); NVIDIA, being fabless, assigned this job to TSMC (Taiwan Semiconductor Manufacturing Company), by far the world's leading contract chip fabricator. As of 2022, TSMC produced about 90% of the world's advanced semiconductors1. The NVIDIA H100 GPU is produced on TSMC's 4-nanometer class process (a variant of 5nm), packing tens of billions of transistors in a fingernail-sized area
It is worth noting that everything up to this point converges at TSMC’s fab: the ultra-pure silicon wafers mined from Spruce Pine and made in Japan and Germany are loaded into ASML’s EUV machine inside TSMC’s facilities; The intricate electronic layout designed by NVIDIA is used to pattern the circuits; the high-purity chemicals from across the world flow into TSMC’s machines for etching and depositing features. At this stage, the international dependencies are truly highlighted: without Taiwanese foundries like TSMC, chip designs would remain drawings, and without those designs, the fabs would have nothing to build. It is not uncommon to hear about the latest semiconductor fab expansion or new export controls in the Taiwanese news. The personal and political converge in these tangible things.
TSMC’s significance is rooted in a specific historical and geopolitical moment. Founded in 1987, the company was established at the end of Taiwan’s nearly forty years under martial law during the dictatorship of the Nationalist Chinese Party (KMT). In the 1980s, Japan dominated the world’s chip market, particularly in memory manufacturing. Similar to what happened recently with the US-China trade war, this dominance drew concern and retaliation from the United States. The U.S. accused Japan of unfair trade practices and over-subsidization, leading to the 1986 U.S.–Japan Semiconductor Agreement. Under pressure, Japan was forced to reduce exports and open its domestic market to American companies.
This intervention created a gap in global chip production; at the time, Taiwan was in the midst of a political and economic transformation, transitioning from authoritarian rule to an emerging democracy. The government sought to shift the country from low-cost manufacturing to high-tech innovation. With the backing of state power, they recruited Morris Chang, a Taiwanese-American semiconductor engineer who had spent over two decades working at Texas Instruments. It is worth noting that before the establishment of TSMC, Morris Chang never set foot on Taiwanese soil. He was born in Ningbo, Chekiang Province of China in 1937. During the Second World War (started in 1937 from the Eastern Asia perspective) and the Chinese Civil War, his family fled to Hong Kong, and he ended up attending a University in the United States.
TSMC was launched as a joint effort between the state, foreign investors like Philips, and private capital that was forced by the government. Its founding also catalyzed a broad semiconductor supply chain in Taiwan, influencing an entire generation. Studying electronic engineering became a national aspiration. My father was part of this wave, working at MediaTek to design integrated circuits. TSMC became the first dedicated semiconductor foundry in the world, disrupting the vertically integrated model. This meant TSMC did not design its own chips but instead manufactured chips for others. This allows other semiconductor companies to outsource production without the fear of competition.
TSMC’s birth was not only a technological milestone but also a political artifact, an institution shaped by state ambition, Cold War geopolitics, and a post-authoritarian vision of national reinvention. Taiwan was not passively positioned in the global tech economy, it was actively constructed as a geopolitical hinge. TSMC’s rise filled the vacuum left by Japan’s retreat and aligned perfectly with the U.S. strategy of offshoring fabrication to trusted, strategically located partners.