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

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.