In 1986, Morris Chang was invited by Li Kwoh-ting, representing Taiwan's Executive Yuan, to head the Industrial Technology Research Institute (ITRI) with the goal of bolstering Taiwan's semiconductor industry. At the time, the high costs and risks associated with the semiconductor sector made it challenging to find investors. Eventually, Philips agreed to a joint venture, contributing $58 million and technology transfers for a 27.5% stake in the newly formed Taiwan Semiconductor Manufacturing Company (TSMC). The Taiwanese government provided 48% of the startup capital, while the rest came from wealthy Taiwanese families, making TSMC a quasi-state project from its inception.

TSMC has since undergone significant growth, albeit with fluctuations due to market demand. In 2011, the company aimed to increase its research and development spending by almost 39% to NT$50 billion to counter rising competition. It also planned to expand its manufacturing capabilities by 30% to meet robust market demand. Subsequent years saw the company further ramp up its capital investments, including a board-approved $568 million in 2014 to increase manufacturing capabilities and an additional $3.05 billion later that year.

Today, TSMC is a Taiwanese multinational semiconductor manufacturing and design firm, and it holds the distinction of being the world's first dedicated semiconductor foundry. It is the most valuable semiconductor company globally and the largest company in Taiwan. Although it has a majority of foreign investors, the central government of Taiwan remains the largest shareholder. TSMC continues to be a leader in its field, with its headquarters and primary operations situated in the Hsinchu Science Park in Hsinchu, Taiwan.