NOTE: This article originally appeared on Linkedin on September 21, 2021
Written by Jaideep Singh Mann
In 1983, Morris Chang, a 52-year-old senior executive at Texas Instruments was snubbed for the company’s top job. He resigned and went on to build the strategically most important company in the world, TSMC. This is his story-
– Morris Chang was born into a middle-class family on July 10, 1931 in Ningbo, Chekiang, China. In 1948, at the height of the Civil War, they moved to Hong Kong.
– In 1949, Morris Chang moved to America after being accepted to Harvard University. After just one year at Harvard, he transferred to The Massachusetts Institute of Technology (MIT) to study engineering.
– While he wanted to continue his studies and get a PhD, he failed qualifying exam, so was forced to enter the job market.
– He took an entry-level job with Sylvania Semiconductor, and later accepted an engineering supervisor role at Texas Instruments, a growing technology company in Dallas, Texas.
– It all clicked for Morris Chang at TI. In his 25 years at Texas Instruments, Chang rose steadily through the management ranks, eventually becoming Senior VP in charge of the company’s global semiconductor business. During this time he also earned his PhD degree from Stanford.
– Being on the fast track to the C-suite, Morris Chang’s career took an unexpected turn as he was transferred to lead the struggling consumer business, then to a staff role. Morris Chang had clearly been snubbed.
– He resigned from TI in 1983.
– Now 52, an age where most careers are winding down, Morris Chang’s journey was just beginning. The government of Taiwan called him on to come to Taiwan and help the country modernize its technology complex by creating a semiconductor industry.
– When he researched the semiconductor industry in Taiwan, what he found was not encouraging – no R&D, no design capabilities, and no IP. The only strength that existed was in some semiconductor manufacturing capabilities.
– Interestingly, this manufacturing capability aligned well with an observation he had during his days at TI: Chip designers often wanted to start their own companies. But given the incredibly high expense associated with building chip manufacturing capabilities, these chip designers were unable to do so.
– So in 1987, Morris Chang founded Taiwan Semiconductor Manufacturing Company (TSMC), a pure-play chip manufacturer.
– In the same way that Shopify has enabled independent players to sell online, TSMC enabled independent chip designers to start their own companies.
– An entire ecosystem of “fabless” (i.e. design-only) chip companies quickly sprouted up.
– Today, TSMC is the world’s largest contract manufacturer of chips, with annual revenues approaching ~$50 billion, and a market cap > $500 billion
– Its manufacturing capabilities are second-to-none. In an industry where technological advantages are extremely difficult to overcome, TSMC appears unstoppable.
– TSMC is also a company with massive strategic importance – arguably the most important company in the world.
– Morris Chang retired from the CEO role in 2018, but remains TSMC’s chairman. His net worth is almost $3 billion.
