Everywhere you go, you carry a little piece of Taiwan with you. That’s because Taiwan dominates the world in the production of integrated circuits, a type of semiconductor microchip found in many devices, from cell phones to cars to medical equipment, and countless inane “smart devices” in between. Taiwan Semiconductor Manufacturing Co. (TSMC) is at the helm of this industry, taking home 55% of global revenues in 2021. Not only does TSMC have numerous inventions of its own under its belt — like the miniscule 5-nanometer chip — but it is also responsible for creating the very business model that organizes much of the semiconductor supply chain: that of the pure-play foundry.

The pure-play foundry model takes advantage of the fact that semiconductor fabrication plants are extremely expensive to build and maintain by centralizing production for most semiconductor companies in a limited number of factories. Hence, most companies that “produce microchips” are actually fabless semiconductor companies. They design and sell chips, but outsource the physical production of those chips to Asian foundries like TSMC — and in the majority of cases, to TSMC itself. TSMC fabs manufacture chips for companies like Apple, Sony, and Intel, among many others.

It hasn’t always been that way. As late as 1990, 37% of chips sold globally were made in the United States. But a 1986 revelation that female semiconductor workers at a plant in Massachusetts experienced miscarriages at twice the expected rate, and several follow-up studies elsewhere confirming high occurrence of reproductive issues — compounded with the high cost of domestic manufacturing — prompted many of those companies to seek labor abroad instead, where costs were lower and regulations fewer and further between. In short, they began to outsource semiconductor production, with all its attendant health impacts, overseas. And in 1987, TSMC debuted the pure-play foundry model, allowing firms to go “fabless” by shifting their chip manufacturing operations to Taiwan.