TSMC plans $500 million venture fund to back chip startups and find the next Nvidia

Taiwan Semiconductor Manufacturing Co. plans to set up a $500 million venture fund to invest in early-stage semiconductor startups, senior executive Kevin Zhang announced on Friday (November 13) at the Nikkei Forum Global Management Dialogue in Tokyo. The fund aims to back companies that could grow into the next Nvidia or Broadcom, formalizing TSMC's investment activities and broadening the artificial intelligence hardware ecosystem, according to Nikkei Asia.

More than double the 2021 fund

TSMC set up a $200 million fund in 2021, mainly to help startups use its advanced chip manufacturing technology. The new fund starts at $500 million and casts a wider net: it is not limited to companies using TSMC's contract manufacturing services, but also covers suppliers and other upstream partners. Executive Hsiao Chiang-ching said investments would not be limited to direct customers, and Zhang cited Nvidia's early collaboration with TSMC as the kind of company the fund hopes to support.

Board approved more investments this week

Earlier this week, TSMC's board also approved investments of up to $500 million each in AI companies OpenAI and Anthropic — preferred shares in OpenAI and common shares in Anthropic at its IPO price — plus a semiconductor investment company capitalized at up to $500 million. Reports put TSMC's related investment commitments at up to $1.7 billion in total, including the new fund. TSMC also reported strong third-quarter results, with revenue of $45.5 billion and net income of $23.2 billion.

Sources: Nikkei Asia; South China Morning Post; TSMC board resolutions. The fund's final size and investment details have not been disclosed.