The goal of this research is to explore what the main elements driving the business model innovation are and what the relationships between business model innovation and technology innovation are. Through analysis of TSMC's business model innovations, this study found that (1) Fierce competition and continual technology advancements in the semiconductor industry lead to TSMC's innovations on business model frequently. (2) There are three phases of TSMC's business model innovation: "pure foundry phase," "manufacturing service and value added phase, " and "inter-firm collaboration phase. " (3) Business model innovation and technology innovation drive each other in three phases and the relation of their innovative frequencies is positive.