How was TSMC originally founded? Not by Morris Chang

The founder of TSMC is not Morris Chang. The real founder of TSMC should be the Taiwanese government from the 1970s to the 1980s, and several very visionary economic bureaucrats who came up with the idea.

Morris Chang was just a professional brought back from abroad by the Taiwanese government at the time to implement this plan. He was not the founder of TSMC. Don’t just follow the crowd. There is only one historical truth.

Stop spreading rumors! even everybody say so.

Table of Contents

Purpose

The main purpose of this article is to restore the semiconductor industry that has enabled Taiwan to dominate the world today, as well as the history of how TSMC was actually established.

The real founder of TSMC should be the Taiwanese government in the 1970s and 1980s, and several very visionary economic bureaucrats who came up with the idea; it was not Morris Chang.

Central bank honours visionary heroes

On August 16, 2022, Taiwan’s Central Bank issued a statement to pay tribute to former Executive Yuan President Sun Yun-suan, in recognition of his contributions to Taiwan’s semiconductor industry.

Breakfast meeting at soy milk shop

US President Biden signed the “Chips and Science Act” on the 9th. In addition, the United States recently invited Taiwan, Japan, and South Korea to form the “Chips Quad Alliance”, which shows the importance of semiconductors today. On August 16, 2022, the Central Bank paid tribute to the late former Premier Sun Yun-suan on Facebook, who facilitated the establishment of the Industrial Technology Research Institute and the Hsinchu Science Park, laying the foundation for the glory of Taiwan’s semiconductor industry; the Central Bank also revealed that Taiwan’s semiconductor industry. The origin of the idea came from a humble breakfast meeting in a soy milk shop in 1974.

On the morning of February 7, 1974, seven people including Executive Yuan Secretary-General Fei Hua, Minister of Economic Affairs Sun Yun-suan, Minister of Transportation Gao Yu-shu, President of the Industrial Technology Research Institute Wang Zhao-zhen, Director Fang Xian-chi, Director of the Ministry of Transportation’s Telecommunications Research Institute Kang Bao-huang and Mr. Pan Wen-yuan. At a breakfast meeting at Xiao Xinxin Soy Milk Shop at No. 40, Nanyang Street, Taipei City, a consensus was reached on developing integrated circuit technology, laying the foundation for Taiwan’s semiconductor industry today.

Among them, Pan Wen-yuan, then director of the Princeton Laboratory of the Radio Corporation of America (RCA), drafted a plan for the development of integrated circuits, led a technical advisory committee composed of Taiwanese experts in the United States, participated in the selection of RCA as a partner in technology transfer, and played an important role in the development of integrated circuits. It has made an indispensable contribution to the development process.

ITRI and engineers sent to US

In September 1974, ITRI established the Electronics Research and Development Center and recruited young engineers to RCA for technology transfer training, cultivating elite talents for Taiwan’s semiconductor industry. After that, the semiconductor industry also successfully entered the stage of private commercialization.

Note: Taiwan sent more than 40 ITRI colleagues to study at RCA, a major semiconductor company in the United States, for paid study. Starting in 1976, Taiwan paid RCA one million US dollars each year for three consecutive years. In 1976, ITRI signed an integrated circuit technology transfer contract with RCA Corporation of the United States. The first group of members who went to the United States for training totaled 19 people, including former ITRI President Shih Chin-tai, UMC founder Tsao Hsing-cheng, MediaTek Chairman Tsai Ming-kai, and others, who later became core figures in Taiwan’s semiconductor industry.

In the 1980s, ITRI planned to develop a very large integrated circuit project. At the invitation of then-Executive Yuan Premier Sun Yun-suan, Executive Yuan Councillor Li Kuo-ting, and ITRI Chairman Hsu Hsien-hsiu, Morris Chang returned to Taiwan in 1985 after many Taiwan government officers’ invitation. He served as president of the Industrial Technology Research Institute (ITRI) before founding TSMC in 1987, innovated the first foundry business model.

Chip foundry business

TSMC quickly developed into a world-renowned chip foundry, and significantly changed the industry ecology, gradually moving towards a vertical division of labor model. Since the 1990s, Taiwan’s semiconductor industry chain has gradually become complete, and representative companies in various fields have worked together to create impressive output value.

The Industrial Technology Research Institute, which led the development of the semiconductor industry, had an important driving force behind it, namely the then Minister of Economic Affairs Sun Yun-suan.

First credit should be Sun Yun-suan

In 1973, Sun Yun-suan promoted the merger of the Joint Industrial Research Institute, the Joint Mining Research Institute, and the Metal Industry Research Institute under the Ministry of Economic Affairs to form the Industrial Technology Research Institute. Minister Sun’s decision at the time laid the foundation for Taiwan’s subsequent scientific and technological research and development, and Minister Sun also had the title of ” The title of “Father of ITRI”.

Sun Yun-suan served as Minister and Premier of the Executive Yuan for nearly 20 years. During his tenure, he experienced challenges such as the second oil crisis and the severance of diplomatic relations between China and the United States. He was brave in taking on responsibilities and responded decisively to maintain stable economic growth.

During his tenure as Premier of the Executive Yuan, The establishment of the Hsinchu Science Park attracted overseas technology professionals to return to Taiwan to start businesses, and worked hard to promote national construction, resulting in a rapid increase in national income. On the other hand, the city-rural gap and the inequality between the rich and the poor caused by economic development were addressed by comprehensively strengthening grassroots construction. Increase farmers’ income and lead Taiwan to join the ranks of developed countries.

President Sun’s integrity and honesty are even more talked about. When President Sun was in office, he had three things he didn’t do: “no socializing, no writing inscriptions, no ribbon cutting.” He also refused any gifts from his subordinates and left the remaining special funds for leaders each month for his subordinates to use as bonuses. But because of this, after retirement, I couldn’t even afford a good 5-square-meter house in Taipei. It is said that even when he wanted to revisit Nice, France with his wife, he almost couldn’t get a visa because he couldn’t provide proof of savings. Even so, Dean Sun still expressed satisfaction that God has been very good to him.

In 1984, President Sun resigned from the post of Premier of the Executive Yuan due to a sudden cerebral stroke and became an advisor to the Presidential Office. Even though his health was not as good as before, he still stayed at his post until his later years, which was touching.

Former President Chen Shui-bian once said in his book “Persistence: Chen Shui-bian’s Oral History Memoirs” that during his presidency, he continued to employ Mr. Sun Yun-suan as an advisor to the Presidential Office. Advisor Sun was very grateful and would definitely attend every monthly meeting of the Presidential Office as long as his health allowed. Participating in a wheelchair.

President Sun’s forward-looking vision and professionalism have made outstanding contributions to Taiwan’s economic development. He is courageous in taking on responsibilities and honest in his integrity, and he is a role model for future generations.

Wang Yongqing’s statement

Visionary Chiang Ching-kuo

On December 4, 2023, veteran media personality Sisy Chen introduced the founding process of TSMC on “TVBS War Room” and also disclosed the story that Wang Yung-ching told her in his later years about why he invested in TSMC.

Note: Formosa Plastics Group, founded by Wang Yung-ching, is the original third largest shareholder of TSMC with a 5% investment.

Sisy Chen pointed out, how was TSMC established? In 1971, the oil crisis hit Taiwan and all industries were depressed. What did Chiang Ching-kuo think about the future besides the ten major construction projects? He asked his chief secretary Fei Hua to find a solution. Fei Hua graduated from Shanghai Jiao Tong University, and he held a famous “soy milk party” with his classmate Pan Wenyuan, the director of R&D at RCA Semiconductor. Pan Wenyuan brought up the word “semiconductor” at the “Soy Milk Club”, and people at the scene, including Sun Yunxuan, heard of the word semiconductor for the first time.

Pan Wenyuan helps a lot

Sisy Chen mentioned that the Industrial Technology Research Institute was established in 1973, and it has been exactly 50 years now. At that time, many graduates from Tsinghua University and Jiaotong University were sent to RCA for training. Pan Wenyuan has never taken a penny from the Republic of China. Originally, Pan Wenyuan was invited to come back to set up a semiconductor company, but Pan said that he was good at research and development, which was not feasible, and that they must find someone in the manufacturing industry. Pan Wenyuan then mentioned a name, “Zhang Zhongmou”.

Morris Chang has no connection with Taiwan before

She said that Morris Chang’s family came directly to the United States from Shanghai and had no connection with Taiwan. He was the vice president of Texas Instruments at the time. He left Texas Instruments in 1985 and went to another company. Pan quickly told Taiwan that the opportunity had come! So Li Guoding brought Morris Chang back. If there was no Industrial Technology Research Institute and no soldiers when Morris Chang came back, there would be no possibility of semiconductors at all.

Sisy Chen revealed that in 1986, the giant was TOSHIBA. TOSHIBA obtained IBM technology and was required by the United States to sign a surrender contract that it would not develop semiconductors for 20 years.

Chiang asked Wang invest TSMC

South Korea also noticed this, so in 1987, Samsung Semiconductor and TSMC were established. TSMC began preparations in 1986 and took a year to prepare. Due to lack of money, Morris Chang looked for foreign investment everywhere, but only Philips was willing to invest.

“The story Wang Yongqing told me in his later years,” Sisy Chen continued, saying that because Wang Yongqing and He Chuan had the most money in Taiwan’s banks, Chiang Ching-kuo summoned Wang Yongqing and asked him to invest in TSMC. Wang Yongqing said he couldn’t even write the word “semiconductor”! But Chiang Ching-kuo had great authority. Wang said not to call him the God of Business, he didn’t understand it at all and was just afraid of Chiang Ching-kuo. Therefore, Wang Yongqing and He Chuan threw all their deposits in Taiwan banks into TSMC. On the first day of TSMC’s listing, Wang Yongqing sold all his shares.

TSMC’s original shareholders

Morris Chang mentioned in the second volume of his autobiography: TSMC’s total share capital is US$145 million, with Philips contributing 27.6% and the Executive Yuan Development Fund contributing 48.3%.

The remaining shareholders include Formosa Plastics with a 5% stake, China-US Plastics with a 5% stake, China-Guangzhou Plastics and related businesses with a 3% stake, Formosa Plastics with a 2% stake, Yaohua Glass with a 2% stake, United Petrochemical with a 1% stake, Taiyuan Textile with a 1% stake, and Chengzhou Plastics with a 1% stake. Electronic 1%.

Taiwan’s National Science Council’s statement

On February 15, 2025, Wu Chengwen, chairman of the National Science Council, said, “Looking back 50 years ago, the Taiwan government decided to develop the semiconductor industry, invested a huge budget to obtain formal authorization from the American RCA Corporation, and introduced CMOS (complementary metal-oxide-semiconductor) components and process technologies, which were not mainstream at the time.” Wu Chengwen recalled that this decision was of vital importance at the time, and that for the past 50 years, the government, universities, research institutions and industry have worked closely together, and the diligent, down-to-earth, sincere and determined semiconductor technology industry practitioners have overcome all difficulties and bravely broken through various difficulties in long-term international competition and cooperation to achieve today’s status.

Wu Chengwen also said that, to be more specific, in 1973, the then Minister of Economic Affairs Sun Yun-suan founded the Industrial Technology Research Institute and gave it the task of developing semiconductors. The Industrial Technology Research Institute immediately gathered many outstanding talents to actively develop semiconductor technology and develop products, and spun off companies. It can be said that it is the cradle of Taiwan’s semiconductor industry.

Closing words

I wrote this article for the following purposes:

Here I would like to pay tribute to the visionary predecessors who founded Taiwan’s semiconductor industry and TSMC.
It is hard to imagine now how much impact it would have on Taiwan’s GDP if Taiwan did not have the semiconductor industry and TSMC. The annual turnover of TSMC alone accounts for 12% of Taiwan’s GDP in 2024!
TSMC was actually founded by the Taiwanese government in the 1970s and 1980s, as well as several very visionary economic bureaucrats who came up with the idea. Morris Chang was just a professional brought back from abroad by the Taiwan government to implement this plan, and he was not the founder of TSMC.

Here is a joke: A well-known Taiwanese semiconductor entrepreneur who is famous for his flattery actually said in 2021 in front of the former president that “the credit for semiconductors becoming the guardian of the country belongs to the president” in order to curry favor with the former president. Disgusting nonsense.

Let me say it again: Morris Chang was just a professional brought back from abroad by the then Taiwanese government to implement this plan. He was not the founder of TSMC. Don’t follow the crowd. There is only one fact. Not almost everyone says this now, they are all trying to curry favor with the powerful and cover up the facts.

Stop spreading rumors! even everybody say so.

Disclaimer

The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.