Special Notes
Chang assisted but not establish
You are advised to read “How was TSMC originally founded? Not by Morris Chang” before move next.
Please note: I used the words “assisted the leadership in establishing” TSMC, not “founded” it. 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.
For Morris Chang’s important advocates, please see my post of “TSMC Morris Chang’s controversial words and deeds“
TSMC’s founder is Taiwanese government
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. You are highly recommended to see my post of “Morris Chang refuted by Yeh Wanan, Taiwan was unwilling to invest in TSMC” Ye Wanan is one of the main staff members who are still alive and are very far-sighted economic bureaucrats who worked there back then.
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.
Morris Chang resume
Birth, growth and schooling
Morris Chang is the founder of TSMC. He was born in Ningbo, Zhejiang Province, China. He grew up in mainland China and Hong Kong as a child. He graduated from MIT with a bachelor’s degree in mechanical engineering in 1952 and a master’s degree in 1953. He received a doctorate in electrical engineering from Stanford University in 1964.
He once served as the president of the Taiwan Industrial Research Institute and a director of the Massachusetts Institute of Technology. He was also the world’s most advanced chairman and received the IEEE Medal of Honor. Among the 50 richest people in Taiwan announced by Forbes in 2020, Morris Chang has assets of US$1.5 billion, ranking 28th.
Career experience
In 1955, because the salary offered by Ford Motor was one dollar less than that of the semiconductor department of Sylvania Electric Products, he chose to work at Sylvania Electric Products and entered the semiconductor industry. In 1958, he went to work in the Texas Instruments Division and became the engineering manager three years later.
Come to Taiwan
In 1968, Morris Chang and Texas Instruments CEO Mark Shepherd Jr. went to Taiwan to discuss Texas Instruments’ plan to set up a factory in Taiwan, and met Li Kwoh-ting for the first time.
In 1972, he was promoted to deputy general manager of Texas Instruments. In 1981, Morris Chang was invited to Taiwan to offer advice and met with Sun Yunxuan. The following year, Morris Chang visited the newly established Hsinchu Science Park.
Sun Yunxuan invited Morris Chang to serve as the president of the Industrial Research Institute, but Morris Chang declined. In 1983, he left Texas Instruments and was hired as Chief Operating Officer of General Instrument Company. In 1985, at the invitation of Sun Yunxuan, he went to Taiwan to serve as the president of the Institute of Industrial Research and concurrently as a director of UMC.
Note: In 1980, Taiwan established UMC with semiconductor technology licensed from Radio Corporation of America (RCA).
The founding of TSMC
Morris Chang’s career at TSMC
On February 1, 1987, he organized the TSMC, a joint venture between Philips of the Netherlands and ITRI, and served as Chairman and President (CEO). According to Morris Chang, when he was developing the foundry model, he invited Intel to become a shareholder, but Intel always insisted on IDM and was not taken seriously. In 1994, the world’s most advanced brand was founded.
Note: Morris Chang stated in April 2021 that TSMC, a new business model established in Taiwan in 1987, specializes in wafer manufacturing services. Before establishing TSMC, he also sought investment from Intel, but the economy was not good at the time and the timing was not right. In addition, “I looked down on manufacturing at that time”, so I was rejected by Intel.
He resigned as CEO of TSMC in 2005 and returned to serve as CEO of TSMC in 2009. In 2013, he resigned as CEO of TSMC and only served as chairman. Officially retired in 2017.
Persuaded by Li Kwoh-ting
In 1985, Li Kwoh-ting persuaded Morris Chang to move to Taiwan (please note that Morris Chang had no connection with Taiwan before this) and served as the dean of the Industrial Research Institute. In 1987, TSMC was established (Huawei was also founded in the same year).
Where did TSMC’s fund come from?
TSMC was 48% funded by the Taiwanese government. Philips invested US$58 million and obtained 27.5% of the shares by transferring semiconductor manufacturing technology licenses. The remaining funds came from wealthy businessmen in Taiwan’s business community at the time.
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%. Morris Chang pointed out that Philips sold all its shares in TSMC in August 2008 and estimated that it would recover 135 times its capital in 21 years.
Key customers
Win Apple
In 2010, Apple senior vice president Jeff Williams contacted him for dinner on a Sunday, and negotiations began the next day. Apple has worked with Samsung to produce the chips it designs for iPhones, but it is looking for a new partner, in part because Samsung has become a major competitor for Apple’s smartphones. TSMC, which does not compete with customers, is well-positioned in this contract.
Negotiations lasted several months. Morris Chang said: “The contract itself is very complicated. This is the first time we have encountered such a thing.” Apple once announced a two-month suspension of negotiations, and Morris Chang heard that Intel may have intervened in the matter. Worried, Morris Chang flew to San Francisco in person to meet with Apple CEO Tim Cook, who reassured him.
In a 2013 interview, then-Intel CEO Paul Otellini said he turned down the opportunity to produce chips for the iPhone because the price Apple wasn’t paying was high enough.
Morris Chang did not make the same mistake. Although Apple demands better terms and lower prices than other companies, he understands that the size of the “contract” will help TSMC quickly surpass its competitors. This is a lesson he learned from Bill Bain, founder of the consulting firm Bain.
Bain, then a consultant at the Boston Consulting Group, worked in the office next to Morris Chang for nearly two years. He analyzed Texas Instruments’ production and sales data and concluded that the more the company produced, the better it performed.
When the deal with Apple was completed, Chang borrowed $7 billion to build the capacity to produce chips for the iPhone.
Over the next few years, Apple briefly turned to Samsung again for iPhone chips, but TSMC became its primary chipmaker. Apple is now TSMC’s largest customer, accounting for more than 20% of TSMC’s revenue and is TSMC’s largest customer.
Nvidia
Among the awards and photos with world leaders that hang on the wall of Chang’s office is a framed cartoon depicting his close relationship with Nvidia founder Jensen Huang.
If Apple has promoted the development of TSMC, then TSMC under Chang’s leadership is the biggest behind-the-scenes hero in helping Nvidia become the world’s most important artificial intelligence design manufacturer. This cartoon describes the story.
In the mid-1990s, when Nvidia was still a start-up, Huang wrote a letter to Morris Chang asking if TSMC could produce chips for him. After a phone call with Huang Renxun, Morris Chang gave a positive answer.
By seizing this opportunity, Chang helped fuel America’s artificial intelligence revolution. With the support of TSMC, Nvidia has become the most important artificial intelligence chip design company in the world. Breakthroughs like generative artificial intelligence rely on vast numbers of Nvidia’s chips to find patterns in vast amounts of data.
In 2018, Jensen Huang gave a speech at the party where Morris Chang announced his retirement. He said that without TSMC, Nvidia would not exist.
Some important views of Morris Chang
Mainland China
In an interview with the New York Times on August 4, 2023, Morris Chang said that Morris Chang believes that China has little chance of winning the semiconductor supremacy. “We have controlled all bottlenecks (referring to the United States and chip manufacturing allies such as the Netherlands and Japan). , South Korea, Taiwan), if we want to strangle them, China is really powerless.”
The United States has introduced a series of policies to prevent Chinese companies from obtaining cutting-edge semiconductor technology. Morris Chang is not worried. Although American companies will lose some business and China will find a way to fight back, overall the current situation is not a problem.
On April 21, 2021, Morris Chang pointed out that although the mainland has 20 years and tens of billions of dollars in subsidies, semiconductor manufacturing lags behind TSMC by more than five years, and logic semiconductor design lags behind the United States and Taiwan by one or two years. The mainland is not yet a rival. , especially in wafer manufacturing.
USA
On August 2, 2022, U.S. House of Representatives Speaker Pelosi and his party arrived in Taiwan. During the visit, they held a closing dinner with President Tsai Ing-wen, TSMC founder Chang Chung-mou, and TSMC director Liu De-sheng.
Most people believe that Pelosi’s whirlwind visit is related to TSMC going to build a factory in the United States. The reason is that TSMC is a company that the United States is actively courting. The United States hopes that TSMC can produce advanced manufacturing processes locally. Pelosi’s visit to Taiwan is probably to persuade Taiwan Semiconductor Manufacturing Co., Ltd. to build a factory in the United States. TSMC expands U.S. investment.
Participants revealed that Morris Chang bluntly told Pelosi during the dinner that he was not optimistic about Taiwan’s semiconductor transplantation to the United States, Japan and other places. Although this sentence surprised the guests present, it was what Morris Chang said from the bottom of his heart. And he expressed the same view more than once.
In his speech on October 2, 2021, Morris Chang said that the U.S. semiconductor manufacturing market share used to reach 42%, but currently has dropped to 17%. The U.S. government is actively promoting local manufacturing of semiconductors, hoping to increase the semiconductor manufacturing market share.
He believes that the U.S. supply chain is incomplete and production costs are high, making it impossible for U.S. semiconductors to be successfully manufactured locally. Morris Chang said that Taiwan Semiconductor is very competitive, but its operations must be in Taiwan.
Government
Morris Chang pointed out in his speech on September 23, 2017 that the government’s attitude should be to build the infrastructure needed by enterprises, including water and electricity, land, environmental protection, and even regulations and laws, so that enterprises can feel at ease.
As for the government’s guidance on industrial policies, Morris Chang believes that “it is best not to care about it.” He quoted former U.S. President Ronald Reagan as saying, “The most terrifying thing is that someone says that I am from the government department and want to help enterprises. ”, in fact, the help to enterprises is relatively limited.
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