TSMC Founder Morris Chang’s Autobiography Part 2 is Out! Here are the Highlights
Few leaders have shaped the modern semiconductor industry as profoundly as Morris Chang, the visionary founder of Taiwan Semiconductor Manufacturing Company (TSMC). In the much-anticipated second volume of his autobiography, Chang shares behind-the-scenes stories of partnerships, challenges, and pivotal decisions that propelled TSMC to its global prominence. Here’s a glimpse into some of the most captivating revelations:
How TSMC-Nvidia Partnership Was Forged - and Why Jensen Huang was Shortlisted as a TSMC CEO Candidate
In 1997, Morris Chang received a letter from Nvidia’s CEO Jensen Huang, saying that he wanted to meet Chang personally because TSMC’s sales representative in San Jose did not take Nvidia’s request for service seriously.
At that time, Chang had just taken up the President position left by Don Brooks and wanted to visit customers in America. He called Jensen Huang during his trip to California and thus started a friendship and collaboration between Nvidia and TSMC.
Chang said three features made the TSMC-Nvidia partnership unique. First, Nvidia has an outstanding graphics chip design team. Second, Jensen was willing to take the risk of betting on TSMC as the company’s sole foundry service provider. Third, Nvidia had TSMC’s full support—TSMC sent two production planners to Nvidia and stayed there for one month. They helped the short-staffed company schedule incoming goods, inventory, and sales shipments and also helped train their new staff.
Since 1998, Nvidia has been among TSMC's top five customers and has become the top customer for many years.
However, the relationship between the two companies was not without challenges. In 2009, due to a glitch in TSMC’s 40nm processing node, Nvidia suffered losses. Jensen Huang demanded a resolution. Chang studied the problem with his staff for three weeks and offered compensation of $100 million. But he emailed Huang, saying that he planned to visit Huang to have salad and pizza during his visit to Silicon Valley. Huang immediately replied, “When do we discuss our business?” “I will have pizza at your place first and we will talk business after 8 in your study,” replied Chang.
They had a serious discussion, and Chang informed Huang of TSMC’s $100 million compensation offer and that they would have to find arbitrators if they failed to reach an agreement within 48 hours. Of course, Huang agreed before the offer expired. Chang was pleased to be able to maintain the partnership and friendship. In the last chapter of the autobiography, Chang revealed that he had consulted with Huang about whether he was interested in being his successor as CEO of TSMC in 2013.
Before Chiang Shang-yi’s retirement, Chang decided to include Huang as one of the candidates besides Mark Liu and C.C. Wei, who were already Co-COOs of TSMC. “Although I was quite familiar with the talent within the company, there was one person outside the company who, in terms of character, vision, professional experience, and knowledge in semiconductors—across all criteria—was worth considering as a successor for TSMC. I knew I should speak with him, and that person was Jensen Huang,” wrote Chang.
Chang went on, “I spent 10 minutes explaining my deep aspirations of TSMC and how TSMC’s package for CEO would be much higher than his income at that time, but he had no question and did not refuse me directly, but simply said, ‘I already have a job’.”
At that point, Nvidia’s market value was only $9 billion, but TSMC’s was 10 times that of Nvidia. Eleven years later, Nvidia has become the world’s most valuable company.
How Did Apple Become a Big Customer of TSMC?
Apple invented the smartphone, an IC-intensive product. However, Apple’s first foundry manufacturer was Samsung and probably also provided memory products to Apple. Their partnership went sour because Samsung started to make its smartphone and became a competitor.
Terry Gou, founder of Foxconn, a major assembly service provider to Apple, introduced then Apple’s COO Jeff Williams to Chang on November 9, 2010. Williams immediately expressed Apple’s interest in having TSMC manufacture logic chips for the iPhone. However, Intel intervened and put the talks between Apple and TSMC on hold for two months. Chang met Tim Cook during his visit to Silicon Valley in April 2011 and was told not to worry because “Intel is not good at doing dedicated foundry service.”
However, in 2021, the truth was revealed by one of Intel’s new CEOs that it was a mistake that Intel decided not to make chips for Apple because the price was too low.
“Unwilling to take the price that customers can afford means the same that they were not good at doing dedicated foundry service,” wrote Chang. “What TSMC is good at is making reasonable profits out of the price that is acceptable to the customer.”
Intel’s Crucial Role in TSMC’s Early Success
Actually, at least in the beginning, Intel had played an important role in TSMC’s ascent to global prominence. In its early years, TSMC struggled to attract U.S. and European customers. That changed when Intel’s Andy Grove, impressed by TSMC’s manufacturing capabilities, placed a small order for microcontroller units (MCUs).
Intel’s rigorous demands for quality and reliability pushed TSMC to implement world-class manufacturing practices, including statistical process control and preventive equipment maintenance. Intel’s confidence in TSMC grew, leading to further collaborations on DRAM production and earning TSMC a reputation as a reliable foundry.
This endorsement opened doors to partnerships with industry giants like Philips, Motorola, and Texas Instruments, cementing TSMC’s position as a trusted supplier.
Intel Foundry Service was established when Pat Gelsinger returned to become the CEO. However, even Gelsinger knows it would be a moonshot for Intel to catch up with TSMC now.
Taking a Leap with ASML
ASML and TSMC were both startups affiliated with Philips, so Chang met ASML’s chairman when he visited Philips to raise funds from the Dutch conglomerate. At that time, ASML had not found any customers willing to use its lithography machine because its price was much higher than competitors such as Nikon and Canon, which dominated the market. Chang said TSMC decided to use ASML because it saw a technical advantage in its lithography technology and felt that it should take the risk to leapfrog and catch up with market leaders. “TSMC and ASML were established almost at the same period, and we grew up together and treated each other as partners,” wrote Chang.
Chang’s Legacy: Bold Decisions and Timeless Lessons
Morris Chang’s autobiography offers more than a history of TSMC—it’s a masterclass in leadership, risk-taking, and relationship-building. Whether nurturing partnerships with future industry giants or embracing unproven technologies, Chang’s decisions exemplify foresight and courage.
As the semiconductor industry faces new challenges, from geopolitical pressures to technological shifts, Chang’s reflections offer valuable lessons for navigating uncertainty and fostering innovation.
What other stories from Chang’s journey could inspire the next generation of leaders? Let us know your thoughts in comments.