The godfather of Taiwan's chip industry retires

By On June 08, 2018

The godfather of Taiwan's chip industry retires

Xinmei Shen
Published 18 minutes ago Big Guns The godfather of Taiwan’s chip industry retiresMorris Chang’s impact on the tech world has earned him comparisons with Bill Gates and Steve Jobs

Whether you own an iPhone or an Android phone, chances are the smartphone you carry around contains a chip made by his company.

Morris Chang, known as the godfather of Taiwan’s chip industry, is the founder and CEO of Taiwan Semiconductor Manufacturing Company (TSMC). He retired this week at the age of 86 after helming the transformative business for more than three decades.

Morris Chang founded TSMC at the age of 56 after studying and working in the US for 38 years. (Picture: Reuters)

It’s hard to overstate the importance of TSMC in shaping the global tech industry as it is today. He started the company in Taiwan in the late 1980s, at a time when the world was dominated by American and Japanese chip makers like Intel, AMD and Fujitsu. These companies not only manufactured their own chips in so-called wafer fabs, they also handled the research and design.

Backed by Taiwan’s government, Chang found a way to carve out a niche for his business by becoming a pure-play foundry -- a firm that focuses solely on manufacturing chips for other companies.

Back then, it was considered one of the very few ways to play to Taiwan’s strength -- which was in building things, rather than designing tech products from scratch.

It was an unprecedented approach: At the time, there was practically no fabless industry -- a term referring to companies that designed their own chips but didn’t have wafer fabs to make them. But it soon became apparent that there was a real demand for foundries like TSMC.

Chang noticed that a lot of chip designers in big companies wanted to strike out on their own but couldn’t raise enough money to build the wafer fabs -- the most capital intensive part of a chip business.

In the beginning, TSMC’s customers were still mostly industry titans. But after a few years, the world started to see an explosive growth of fabless companies of all sizes -- tech firms with plenty of ideas but no fabs themselves.

Foundries like TSMC took the burden of manufacturing from fabless firms, and helped drive the growth of consumer technology like PCs and mobile phones.

A clean room in a typical wafer fab. (Picture: Taiwan Semiconductor Manufacturing Co., Ltd.)

As Ben Thompson writes on Stratechery, “The fabless revolution was critical to the emergence of mobile as the dominant computing platform: the array of chips used not only in phones but in all of the networking equipment to support them is designed by fabless companies like Qualcomm or Apple and manufactured by the likes of TSMC.”

Today, Taiwan-made chips can be found in many of the world’s smartphones and computers, powering the world’s tech industry. TSMC is also the most valuable tech company listed in Taiwan, and holds more than half of the world’s foundry market.

Chang was born into a middle-class family in the eastern Chinese city of Ningbo and lived through a tumultuous wartime period in China before moving to the US to study. A graduate of Harvard, MIT and Stanford, he spent 25 years at semiconductor firm Texas Instruments, and was a senior vice president before he left for another executive job in New York. He founded TSMC in 1987.

After his retirement this week, he told Taiwan media he plans to spend his free time writing a biography, playing bridge, and travelling with his wife.

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