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2024 | OriginalPaper | Chapter

Exploring Taiwanese Multinationals: General Trends in FDI and a Case Study of TSMC

Author : Yumiko Nakahara

Published in: Emerging Multinationals from Asia and Europe

Publisher: Springer Nature Singapore

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Abstract

This chapter examines the general investment trends and features of Taiwanese multinationals. We conduct a case study of Taiwanese multinationals, specifically Taiwan Semiconductor Manufacturing Company Limited (TSMC). Additionally, we explore TSMC’s position in the global semiconductor industry concerning Taiwanization and global production network (GPN) 2.0. For Taiwanese multinationals, outward foreign direct investment (FDI) significantly surpasses inward FDI. Global semiconductor production heavily relies on Taiwanese companies, especially TSMC, and this phenomenon is termed “Taiwanization.” Taiwanization refers to the dependence on Taiwanese companies as manufacturers and dependence on Taiwan as a location of semiconductor production. TSMC has several competitive advantages, including its technological capabilities, significant R&D spending, financial strength, and dedication to customers as a manufacturing service company. Given its competitive advantages, TSMC has become a core supplier, as envisioned by GPN 2.0. TSMC’s investment in Japan has led to related investments in the semiconductor industry, boosting the local economy. Attempting to align TSMC with Ramamurti’s (2009, 2020) framework, during its establishment, it exhibited government-specific advantages (GSA). However, it subsequently transitioned to firm-specific advantages (FSA). TSMC’s current stage of evolution can be categorized as “mature.” The global context surrounding TSMC includes the US–China conflict and the rising global demand for semiconductors.

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Footnotes
1
Foundry is the business model that specializes in semiconductor contract manufacturing.
 
2
GPU is a semiconductor that is originally developed for image processing in games. Its ability to process multiple pieces of data concurrently has become popular among AI researchers and is considered indispensable for generative AI. NVIDIA, the developer of the GPU, is thus given attention. NVIDIA has a more than 90% share of the GPU market (The Nikkei August 29 2023). ChatGPT uses 10,000 GPUs (The Nikkei June 14 2023), designed by NVIDIA and manufactured by TSMC.
 
4
This high salary also indicates TSMC’s competitiveness in the recruitment market of Kumamoto; thus, they can hire excellent human resources.
 
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Metadata
Title
Exploring Taiwanese Multinationals: General Trends in FDI and a Case Study of TSMC
Author
Yumiko Nakahara
Copyright Year
2024
Publisher
Springer Nature Singapore
DOI
https://doi.org/10.1007/978-981-97-4042-0_2

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