TAIPEI -- Tighter U.S. sanctions against China's Huawei Technologies announced in May 2020 shifted the global semiconductor supply chain in a way nobody had expected, with a flood of orders enriching Taiwanese foundries and changing the island's landscape.
The boom is palpable in Hsinchu, where Taiwan Semiconductor Manufacturing Co. has its headquarters. There, the company's recent success has fueled a buying spree in luxury condominiums.
"When we started accepting orders for luxury condos the other day, we sold out within three days," a local real estate agent said. "Construction hadn't even started yet."
Located on Taiwan's northwestern coast, Hsinchu was once a relatively quiet city compared with the hustle and bustle of the island's capital of Taipei. But "everything began to change last June," a 40-something local man said, pointing to an almost immediate surge in condo prices.
Shortly after the U.S. tightened export controls on Huawei, the desperate Chinese company flooded TSMC with orders to snap up more chips. TSMC had never been busier, and its employees reaped fat bonuses for keeping up with surging demand.
Many seem to have spent these additional checks on housing.
A neighborhood near the local Costco, which is also close to TSMC headquarters, has been especially popular. Units priced around $1 million there are still being snapped up quickly, mostly by TSMC employees.
"There's one person who bought 20 condo units alone," a company insider said.
The world further leaned on Taiwanese players including TSMC after a cold snap in Texas this February forced a Samsung Electronics plant to suspend production. A factory fire at Japan's Renesas Electronics in March exacerbated the chip shortage.
Semiconductor factories here are already operating at the limit of their capacity. At an industry event in late March, TSMC Chairman Mark Liu warned global companies not to overestimate the capacity of Taiwanese chipmakers.
TSMC is building a sprawling new campus in the southern city of Tainan, on the opposite end of the island from its Hsinchu headquarters.
The site last year began making cutting-edge chips supplied exclusively to Apple for its iPhone 12, and any production halt there could lead to widespread disruptions to the global economy. TSMC has beefed up security for the facility, and the area "feels completely different now," a source at a supplier said.
TSMC is expected to continue driving changes in Taiwan. After logging a net profit of 518 billion New Taiwan dollars ($17.6 billion) on revenue of NT$1.34 trillion in 2020, the company is preparing to hire another 9,000 employees this year and spend $100 billion over three years in a massive investment drive.