BYD Set Out to Win the EV Race. Then, TSMC Decided to Sell One of Its Factories

“Build your dreams.” That’s the message behind the acronym BYD, the electric vehicle (EV) manufacturer becoming the absolute market leader. In 2024 alone, it sold 4.27 million electric and plug-in hybrid cars, 2.5 times more than Tesla (1.7 million). Its market dominance is currently imperial.

Remarkably, unlike other EV manufacturers, BYD manufactures virtually all the critical components of its vehicles—not just the batteries but also the electric motors, chassis, and semiconductors.

It does this through BYD Semiconductor, which, as Nomad Semi points out, is one of its most essential divisions after its subsidiary FinDreams Battery, responsible for battery manufacturing.

Wang Chuanfu founded the company in 1995 and initially focused on developing rechargeable batteries. By 2003, the company had outperformed all others in the sector and entered the automotive industry by purchasing Xi’an Qinchuan Automobile Company. But first, something unique happened.

TSMC Decided to Sell One of Its Factories

Just a year earlier, in 2002, BYD Semiconductor was formed, a fabless division that designed chips but delegated their manufacture to other companies (foundries) to develop integrated circuits that protect its batteries from overheating or overcharging.

In 2004, TSMC decided to close Fab 1, its first manufacturing facility. In 2005, it sold all the equipment used for a 6-inch silicon wafer fab—popular in the 1990s but now somewhat obsolete—to SinoMOS Semiconductor. This company licensed patents from TSMC and employed engineers who had previously worked there.

Things didn’t go well, and Ningbo SinoMOS ran into financial difficulties. BYD seized the opportunity and bought the company for $29 million.

The company, founded by Wang, was already developing EVs. Here, it made a remarkable leap: By developing its own chips, it moved from being a fabless company to an integrated device manufacturer (IDM) that controlled all phases of chip development, from design to production.

Chips Everywhere

Since then, BYD’s activities have accelerated, and its product portfolio has expanded. It has developed chips for power management (IGBTs, MOSFETs, diodes, current integrated circuits), microcontrollers (MCUs), sensors (temperature, pressure, position, current), and optoelectronic chips (photodetectors, optocouplers, etc.).

The most important of these are IGBTs (insulated-gate bipolar transistors), particularly critical components for power conversion systems. They act as electronic switches that help transition from the direct current provided by batteries to the alternating current required by electric motors.

BYD Semiconductor started developing its first IGBT chips in 2005 and has improved them ever since. It introduced its latest IGBT 6.0 chips in 2022, nearly matching the performance of the most advanced chips from competitors like Infineon. This allowed BYD to become the primary IGBT supplier for Chinese manufacturers.

As mentioned earlier, its progress with IGBTs highlights the division’s growth: BYD Semiconductor now has several subsidiaries and fabs producing much more advanced 8-inch and 12-inch wafers, enabling it to create increasingly sophisticated chips.

More from Xataka On

BYD Surpassed the $100 Billion Revenue Mark in 2024. Tesla Is Still Far From This Feat

New Developments for Autonomous Driving and Superfast Charging

In November 2024, it announced a collaboration with TSMC and MediaTek to develop two new chips. One, for autonomous driving and driving assistance systems, will eventually replace the chips currently used in BYD vehicles (Nvidia Orin and Horizon Robotics J6E) and enable Level 3 autonomous driving.

The second is the BYD9000, a 4 nm photolithography chip based on the MediaTek Dimensity 9000, aimed at advanced infotainment systems.

However, there are more examples, including developments based on silicon carbide, which has become increasingly important in electric cars in recent years.

BYD has worked with this material for some time and, in March 2025, presented its Super E Platform. This system enables superfast charging in EVs, allowing a 100-kWh battery to recharge in just six minutes.

This achievement was possible thanks to BYD Semiconductor’s development of special 1,500V chips, used for the first time in the automotive industry. These chips can handle higher voltages and, compared to traditional EVs that use 400- and 800-volt systems, allow for less energy loss and faster charging.

Good News for BYD, Bad News for Others

The quiet rise of BYD Semiconductor as a chip supplier could set a trend for other automakers, which have so far delegated this part of the business to specialized companies such as Infineon, NXP, Onsemi, Texas Instruments, and Renesas.

All of them dominate the automotive semiconductor market for now, but things could change. EVs use far more semiconductors than internal combustion cars, making BYD’s vertical integration (it makes almost everything in its cars) particularly attractive to manufacturers.

Nomad Semi analysts believe that NXP, Onsemi, and Infineon are the most exposed to this trend. According to their data, the automotive industry accounts for half of their sales, and sales in China are significant for those companies and Renesas.

Is this a new semiconductor giant? Indeed, not in the broadest sense: BYD Semiconductor focuses entirely on chips and components for its vehicles. Still, BYD’s frenetic growth in the EV industry could make things very difficult for its rivals in this sector.

Images | Michael Förtsch (Unsplash) | Nomad Semi | IDC

Related | There’s One Clear Winner From the 25% Car Tariffs: BYD, the Epitome of Everything China Has to Gain