TSMC Was Worth Three Times 815 OTC-Listed Companies Combined: Concentrate Resources or Diversify Risk?

Originally published 2024-03-06Robin’s commentary (as of March 2024; valuations are from that time)

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English translation of the Chinese post originally published 2024-03-06. Translated 2026-11-04 with AI assistance. Historical figures and claims have not been updated or independently verified. 中文原文

Reading guide

Robin notes that TSMC’s market capitalization was about 18.93 trillion, versus 6.18 trillion for 815 Taipei Exchange-listed companies combined—roughly three times as much. One company represented about 30% of exchange market value. He sees a power-law pattern, citing an early YC observation that its top investment returned more than investments two through two hundred combined. He outlines two views: diversify to reduce overconcentration and ‘Dutch disease,’ or focus scarce talent and resources on one globally competitive strength. He favors focus but worries about a generational technological shift making semiconductors suddenly less important, drawing an analogy with artificially produced spice in Dune.

Key points

In March 2024, TSMC was worth roughly three times 815 Taipei Exchange-listed companies combined.
The debate is between concentrating resources and moderate diversification.
The main concern is a generational technology shift changing the industry’s importance.

Columns and beams in an open building are connected by central rods and balanced weights, suggesting structure and checks in governance. — Capital markets & governanceThematic illustration · AI generated

Full text — English translation

One TSMC is worth three times the combined market capitalization of 815 companies listed on the Taipei Exchange. TSMC’s market capitalization: 18.93 trillion. The 815 Taipei Exchange-listed companies: 6.18 trillion. These include outstanding companies such as E Ink, described here as dominating the world’s electronic-paper market, GlobalWafers, eMemory, IGS, Phison, Vanguard International Semiconductor, Sino-American Silicon, ASPEED, Parade, and Simplo. To some extent, this illustrates the power law. Early in YC’s history, it compiled a statistic: its top portfolio investment returned more than investments two through two hundred combined, while the second returned as much as investments three through two hundred combined. TSMC and the semiconductor supply chain it drives are extremely important to Taiwan. TSMC alone accounts for 30% of exchange market capitalization, so its movements can profoundly affect the entire Taiwanese stock market. This has prompted two lines of discussion. One worries that excessive concentration could create ‘Dutch disease’ and calls for moderate diversification. The other argues that Taiwan’s labor supply—amid rapidly falling birthrates—and resources are limited. Rather than spreading effort across too many projects, it should concentrate all resources, primarily people, on one important activity with global competitiveness or even the potential for monopoly. The TSMC-centered semiconductor supply chain is unquestionably a global powerhouse. Personally, I favor concentrating resources on doing one thing well. My concern is not another country catching up in semiconductors, but an entirely new technology—perhaps quantum technology or another generational advance—that suddenly makes semiconductors unimportant. Take the currently popular Dune films as an example. Spice exists only on Arrakis, and controlling spice means controlling the universe. But in later Dune novels, people on another planet develop a technology to mass-produce artificial spice. The spice produced by sandworms then becomes unimportant, even negligible.

These articles are personal notes, book excerpts, and collected reprints. Figures and events reflect the time of the original publication, are not current information, and do not constitute investment advice.

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