Abstract
Following the first mover advantage in the pure-play-foundry business-model innovation, TSMC continuously dominates the foundry segment up to 50.1% market share, and 44% gross margin in 3rd quarter 2005, which are far outpacing the nearest foundry competitor UMC, United Microelectronic Corporation at 18% market share and 12.5% gross margin, respectively. TSMC has also become the solid member of worldwide top 10 semiconductor suppliers since 2002, and even outpaced Freescale, Philips, and Sony in 2005 (Table 1). The aim of the present study is to discuss and examine those critical success factors (CSF) that are specifically forming the competitive advantages for pure-play-foundry (PPF) companies to be successful through TSMC focused study. This paper is composed of four sections. First, an extensive literature review is conducted to find the major critical factors that shaping the TSMC success. Secondly, introductions to the evolution of semiconductor industry, pure-play foundries emerging, and further extend to the supply chain shifts will be presented accordingly. Thirdly, investigation results of TSMC critical success factors along with the transformation from manufacturing-centric through technology-centric to service-centric are examined. Conclusions and several suggestions for TSMC will be summarized in the end of the paper. Keywords: TSMC, Foundry, Critical Success Factor, Competitive Advantage