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The Chip Titan Whose Life’s Work Is at the Center of a

Tech Cold War
At 92, Morris Chang, the founder of Taiwan Semiconductor Manufacturing Company, can
no longer stay in the shadows.

By Paul Mozur and John Liu

Reporting from Taipei, Taiwan

Aug. 4, 2023 Updated 6:28 a.m. ET

In a wood-paneled office overlooking Taipei and the jungle-covered mountains that

surround the Taiwanese capital, Morris Chang recently pulled out an old book stamped
with technicolor patterns.

It was titled “Introduction to VLSI Systems,” a graduate-level textbook describing the

intricacies of computer chip design. Mr. Chang, 92, held it up with reverence.

“I want to show you the date of this book, 1980,” he said. The timing was important, he
added, as it was “the earliest piece” in a puzzle that came together for him — altering not
only his career but also the course of the global electronics industry.

The insight that Mr. Chang gained from the textbook was deceptively simple: the idea that
microchips, which act as the brains of computers, could be designed in one place but
manufactured somewhere else. The notion went against the semiconductor industry’s
standard practice at the time.

So at the age of 54, when many people begin thinking more about retirement, Mr. Chang
instead put himself on a path to turn his insight into a reality. The engineer left his adopted
country, the United States, and moved to Taiwan where he founded Taiwan Semiconductor
Manufacturing Company, or TSMC. The company does not design chips, but it has become
the world’s biggest manufacturer of cutting-edge microprocessors for customers including
Apple and Nvidia.

Today, the company that partially exists because of a textbook is a $500 billion juggernaut
that has put the most advanced chips in iPhones, cars, supercomputers and fighter jets. So
critical are its airplane-hangar-size chip factories, called fabs, that the United States, Japan

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and Europe have courted TSMC to build them in their neck of the woods. Over the past
decade, China has also invested hundreds of billions of dollars to recreate what TSMC has
done.

A silicon wafer by TSMC at the 2020 World Semiconductor Conference in Nanjing, China. Agence France-Presse
— Getty Images

Mr. Chang’s unlikely entrepreneurial journey helped Taiwan become an economic giant,
restructured the way the electronics industry worked and ultimately charted a new
geopolitical reality in which a linchpin of global economic growth lies in one of the world’s
most volatile spots.

That has thrust Mr. Chang, and the company he created, into the spotlight. And at the
twilight of his career, a man who has preferred to remain in the shadows reflected on what
he has built and what it means to no longer be able to stay under the radar.

“It doesn’t make me feel particularly good,” said Mr. Chang, who retired in 2018 but still
appears at TSMC events. “I would rather stay relatively unknown.”

Over a recent three-hour discussion in his office, Mr. Chang made it clear that he identifies
as American — he obtained his U.S. citizenship in 1962 — at a time when the company he

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founded is at the center of a technological Cold War between the United States and China.
Even as the rivalry for tech leadership intensifies, he does not give China much of a chance
for semiconductor supremacy.

“We control all the choke points,” Mr. Chang said, referring collectively to the United States
and its chip-making allies such as the Netherlands, Japan, South Korea and Taiwan. “China
can’t really do anything if we want to choke them.”

More than a dozen people familiar with Mr. Chang, many of whom knew him as a colleague
at TSMC, said he built the company — and outmaneuvered giants like Samsung and Intel
— by being meticulous, stubborn, trusting his best people and, crucially, having boundless
ambition and making daring moves when justified. When TSMC stumbled after the 2008
financial crisis, he returned as chief executive at age 77 to take over again.

“He’s probably the only person left in the chip industry who was present at the creation of
the industry itself,” said Chris Miller, the author of the book “Chip War” and an associate
professor of international history at the Fletcher School at Tufts University. “That he’s not
only still in the industry but at the center and top of it is extraordinary.”

To understand the tech industry’s future, it is crucial to understand the world through Mr.
Chang’s eyes and how he made that initial bet when others didn’t. And unlike today’s tech
moguls — such as Elon Musk and Mark Zuckerberg, who have publicly considered a cage
fight — Mr. Chang has shown more restraint. If competition between the global tech giants
is a series of high-stakes poker games, he is the quiet man who runs the casino.

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The TSMC Museum of Innovation in Hsinchu, Taiwan. When Morris Chang founded TSMC in 1987, the business
model was clear in his head and he had plans for TSMC to tap into a global market. Lam Yik Fei for The New York
Times

Almost an automaker
Mr. Chang was born in 1931 in a China on the brink of war. Before the age of 18, he lived in
six cities, changed schools 10 times, experienced bombings in Guangzhou and Chongqing,
and crossed the front lines as his family fled Japanese-occupied Shanghai during World
War II.

When he made it to Hong Kong in 1948 with his family, who by then were trying to get
away from the Chinese Communist Party’s advancing army, there was no going back.

“My old world crumbled as the mainland changed its color, and a new world was yet to be
established,” he wrote in his autobiography, which was published in 1998.

In 1949, Mr. Chang moved to the United States, attending Harvard before transferring to
the Massachusetts Institute of Technology to study mechanical engineering. In 1955, when
he twice failed a qualifying exam for a doctoral degree at M.I.T., he decided to test out the
job market.

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“Many years later, I considered failing to be admitted to the Massachusetts Institute of

Technology’s Ph.D. program as the greatest stroke of luck in my life!” he wrote in his
autobiography.

Two of the best offers arrived from Ford Motor Company and Sylvania, a lesser-known
electronics firm. Ford offered Mr. Chang $479 a month for a job at its research and
development center in Detroit. Though charmed by the company’s recruiters, Mr. Chang
was surprised to find the offer was $1 less than the $480 a month that Sylvania offered.

Inside a TSMC chip factory in Hsinchu. “I really had no plan to set up TSMC, to set up any company in Taiwan,”
Mr. Chang said. Lam Yik Fei for The New York Times

When he called Ford to ask for a matching offer, the recruiter, who had previously been
kind, turned hostile and told him he would not get a cent more. Mr. Chang took the
engineering job with Sylvania. There, he learned about transistors, the microchip’s most
basic component.

“That was the start of my semiconductor career,” he said. “In retrospect, it was a damn
good thing.”

Three years at Sylvania opened doors and cemented Mr. Chang’s passion for

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semiconductors. But Sylvania struggled, teaching him a lesson that would inform how he
later ran TSMC.

“From the beginning, the semiconductor industry has been a fast-paced and unforgiving
industry,” Mr. Chang wrote of Sylvania’s eventual collapse in his autobiography. “Once you
fall behind, catching up becomes considerably difficult.”

In 1958, he jumped to a buzzy new semiconductor company, Texas Instruments. The Dallas
company was “youthful and energetic,” with many employees working over 50 hours a
week and sleeping overnight in the office. Four years later, Mr. Chang became an
American, an identity he considers primary.

“Ever since I fled Communist China and went to the United States and became naturalized
in 1962, my identity has always been American, and nothing else,” he said.

Mr. Chang became a pillar of Texas Instruments’ then world-beating semiconductor

business. Breakthroughs were constant. In the 1970s, the firm produced a chip that could
synthesize the human voice, which led to the famed Speak & Spell toy, a hand-held device
that helped children with spelling and pronunciation.

“It’s just like Camelot, but it was not a long period of time,” he said.

In the late 1970s, Texas Instruments turned its focus to the burgeoning market for
calculators, digital watches and home computers. Mr. Chang, then in charge of the
semiconductor side, realized his career there was approaching a “dead end.”

It was time for something different.

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When TSMC held an event at a plant in Arizona last year, Mr. Chang delivered remarks. The United States,
Japan and Europe have in recent years courted TSMC to build hangar-size chip factories, called fabs, in their
neck of the woods. Adriana Zehbrauskas for The New York Times

Putting the puzzle pieces together

If the first puzzle piece that led to TSMC’s creation was the textbook, the second was an
experience that Mr. Chang had toward the end of his time at Texas Instruments.

In the early 1980s, Texas Instruments opened a chip factory in Japan. Three months after
the production line began churning out chips, the plant’s “yield” was double that of the
company’s factories in Texas. Yield is a key statistic that refers to how many usable chips
emerge from production.

Mr. Chang was dispatched to Japan to solve the yield mystery. The key was the staff, he
found, with turnover surprisingly low among well-qualified employees.

But try as it might, Texas Instruments could not find the same caliber of technicians in the
United States. At one U.S. plant, the top candidate for a supervisor job had a degree in
French literature and no engineering background. The future of advanced manufacturing
appeared to be in Asia.

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In 1984, Mr. Chang joined General Instrument, another chip firm, where a third puzzle
piece fell into place. He met an entrepreneur who later started a company that would only
design chips without also making them, which was then uncommon. He spotted a trend
that would prove to have staying power: Today most semiconductor companies design
chips and outsource manufacturing.

This final piece coincided with Taiwan’s transition from a labor-intensive and heavy
industry economy to a high-tech one. When Taiwanese officials set their sights on
developing the semiconductor industry, they asked Mr. Chang, whose reputation as a chip
expert was established, to lead an institute for supercharging innovation.

So in 1985, Mr. Chang, then 54, left the United States for a place he knew only from several
visits to a Texas Instruments factory.

“I certainly had no plan to spend nearly so much time in Taiwan,” he said. “I thought I was
going back in maybe just a few years, and I really had no plan to set up TSMC, to set up
any company in Taiwan.”

Within weeks of Mr. Chang’s arrival, Li Kwoh-ting, a government official who became
known as the godfather of Taiwan’s tech development, asked him to make the state-led
chip project commercially viable.

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The TSMC office in the Southern Taiwan Science Park in Tainan. Mr. Chang’s entrepreneurial journey and
success helped Taiwan become an economic giant and restructured the way the electronics industry
worked. Lam Yik Fei for The New York Times

When Mr. Chang assessed Taiwan’s strengths and weaknesses, he sensed an opening. “I
concluded that Taiwan was a lot more similar to Japan than the U.S.,” he said, referring to
his experience with the Texas Instruments’ factory in Japan.

In 1987, Mr. Chang founded TSMC. The business model was clear in his head: TSMC would
make chips for other companies and not design them. That meant it just had to win over
those inside the industry and then focus on what it could do best — manufacturing.

From the get-go, Mr. Chang had plans for TSMC to tap into a global market. He introduced
professional management systems, which were uncommon in Taiwan, at the company. To
foster an international environment, internal communications were in English.

His vision proved prophetic. As semiconductors became more complex and expensive to
produce, only a few firms could even afford to try. Making chips involves hundreds of steps
that pull on advanced lasers and chemical manipulations to create tiny pathways for
electronic signals that do the most basic calculations for a computer. Costs were
astronomical.

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Over the years, Mr. Chang kept going as others dropped out. If TSMC could attract enough
customers, leveraging economies of scale, it had a chance to take out the kings: Intel and
Samsung.

In 1997, Mr. Chang recruited a new head of research of development, Chiang Shang-yi. He
told Mr. Chiang to benchmark TSMC against the industry leader, Intel.

“Our goal is to be No. 1, barring none,” Mr. Chang said.

Mr. Chiang was surprised. “To be No. 1, you have to spend three times as much as your
next competitor,” he replied, implying that being in the lead would be too lofty and costly a
goal.

“It may be three times, but I do want to spend enough so that we become No. 1,” Mr. Chang
said. And he was prepared to be patient, even after stepping down as TSMC’s chief
executive in 2005 and staying on as the company’s chairman.

Closing the Apple contract

In April 2009, angry TSMC employees — many who had recently been let go by the
company — set up a protest camp at a leafy playground in Taipei’s quiet residential
neighborhood of Dazhi. They were down the street from Mr. Chang’s upscale apartment
building.

As dark fell, the protesters rolled out sleeping bags next to a slide and jungle gym,
covering themselves with a large sign that read “TSMC lies lies lies.” Throughout its more
than two-decade history, TSMC had never laid off employees. Yet after the 2008 financial
crisis, Mr. Chang’s successor, Rick Tsai, began letting employees go.

Mr. Chang, then 77, decided he could no longer stay on the sidelines. He took back his job,
rehired the talent Mr. Tsai had let go and more than doubled TSMC’s spending.

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After the 2008 financial crisis, Rick Tsai, Mr. Chang’s

successor, began letting go employees. In 2009, Mr.
Chang, then 77 and four years into retirement, took back
his job and rehired the talent Mr. Tsai had laid off. Sam
Yeh/Agence France-Presse — Getty Images

Coming at a tough time for the industry, the move was not appreciated by investors.
Elizabeth Sun, TSMC’s former head of investor relations, recalled her reaction to the news:
“When I heard it, I felt like banging my head against a wall.”

But the bet paid off. In 2010, Mr. Chang got the call that would turbocharge TSMC’s growth
and clinch its lead over Samsung and Intel. Jeff Williams, a senior vice president at Apple,
reached out through Mr. Chang’s wife, Sophie Chang, who is a relative of Terry Gou, the
founder of Foxconn, Apple’s largest assembler.

The call led to a Sunday dinner with all four of them, which turned into negotiations the
next day. Apple had worked with Samsung to produce the microchip it designed for the
iPhone, but it was looking for a new partner, partly because Samsung had become a major

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smartphone competitor. TSMC, which does not compete with its customers, was in pole
position for the contract.

The discussions stretched on for months. “It was very complicated — the contract itself,”
Mr. Chang said. “It was the first time we ran into this kind of thing.”

At one point, Apple announced a two-month pause in talks. Mr. Chang heard Intel might
have intervened.

Worried, Mr. Chang flew to San Francisco to meet Tim Cook, Apple’s chief executive, who
reassured him. In a 2013 interview, Paul Otellini, then Intel’s chief executive, said he had
turned down the chance to make the chips for the iPhone because Apple would not pay
enough.

Mr. Chang would not make the same mistake. Apple demanded better terms and lower
prices than others, but he understood the contract’s scale would help TSMC rocket past
competitors. That was a lesson he learned from Bill Bain, who founded the consulting firm
Bain & Company, back at Texas Instruments.

Tim Cook, Apple’s chief executive, left, shared a toast with Mr. Chang in Phoenix last year. Caitlin
O'Hara/Bloomberg

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Mr. Bain, then a consultant for Boston Consulting Group, had worked in an office next to
Mr. Chang for almost two years. He had analyzed Texas Instruments’ production and sales
numbers and argued that the more the company produced, the better it would perform.

When the deal with Apple was complete, Mr. Chang borrowed $7 billion to build the
capacity for making millions of chips for the iPhone.

In the ensuing years, Apple briefly turned to Samsung for iPhone chip production again,
but TSMC became its primary chip maker. Apple is now TSMC’s largest client, accounting
for about 20 percent of revenue.

Mr. Chang remains cautious about what he says about TSMC’s customers even now. After
beginning a story about Apple at his office, he wondered whether he had said too much.

“I don’t think I have exceeded Apple’s limits of what to tell you,” he said.

In a statement, Mr. Williams, now Apple’s chief operating officer, said Mr. Chang had
“pushed the semiconductor industry to new frontiers.”

In 2018, Mr. Chang, at 86 years old, retired again. By then, TSMC had succeeded where
others lagged, mass producing chips with electronic pathways the size of a DNA double
helix. That gave Mr. Chang confidence that he had achieved a key tenet for TSMC:
technological leadership.

Spurring the A.I. revolution

Among the awards and photos with world leaders that stud the walls of Mr. Chang’s Taipei
office, one is a framed comic portraying his close relationship with Jensen Huang, a
founder of the chip firm Nvidia.

If Apple turbocharged TSMC, it was Mr. Chang who helped make Nvidia the world’s most
important designer of artificial intelligence chips. The cartoon tells the story. In the
mid-1990s, when Nvidia was a start-up, Mr. Huang sent a letter to Mr. Chang asking if
TSMC would make its chips. After a call with Mr. Huang, Mr. Chang agreed.

“I liked him,” Mr. Chang said of Mr. Huang.

By taking that chance, Mr. Chang helped spur the A.I. revolution in the United States. With
TSMC’s manufacturing, Nvidia became the world’s most important A.I. chip designer.
Breakthroughs like generative A.I. rely on huge numbers of Nvidia chips to find patterns in
vast amounts of data.

In a 2018 speech at Mr. Chang’s retirement gathering, Mr. Huang said Nvidia — now worth
$1 trillion — would not exist without TSMC. An inscription on the comic, which Mr. Huang

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gave to Mr. Chang, reads: “Your career is a masterpiece — a Beethoven’s Ninth

Symphony.”

Mr. Chang, left, with Jensen Huang, the chief executive of Nvidia, in Phoenix last year. If Apple turbocharged
TSMC, it was Mr. Chang who helped make Nvidia the world’s most important designer of artificial intelligence
chips. Ross D. Franklin/Associated Press

For Mr. Chang, the final notes of that masterpiece have not yet been played. He is healthy
for a nonagenarian, though he can no longer smoke a pipe — once his trademark in photos
— after he had stents put into his heart a few years ago.

At his office, he still keeps a Bloomberg terminal. He also makes regular public
appearances around Taiwan to discuss global politics and the economy. Like many, he
worries about a potential conflict between the United States and China over Taiwan,
though he believes the chance of such a confrontation is low.

“The chance of China invading Taiwan, amphibious warfare and all that stuff, I think that’s
a very, very low probability,” he said. “A blockade of some kind, I think I still put it as low
probability, but it’s still a chance and I want to avoid that.”

Mr. Chang said he was not worried about U.S. policies that have cut off Chinese firms from

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access to cutting-edge semiconductor technology.

“I think it’s still OK,” he said, though he noted U.S. companies would lose business and
China would find ways to fight back.

As the conversation wound down, Mr. Chang said he had some regrets that he could not be
in the driver’s seat as TSMC faces geopolitical challenges. But he said the timing of his
retirement in 2018 made sense, driven by technology and not politics.

“I was literally sure that we had achieved technology leadership,” he said of that time. “I
don’t think we’ll lose it.”

Paul Mozur is the global technology correspondent for The Times, based in Taipei. Previously he wrote about
technology and politics in Asia from Hong Kong, Shanghai and Seoul. More about Paul Mozur

John Liu joined The Times in 2021 and covers news in China. Previously, he was a reporter for The Myanmar
Times, and wrote about Taiwan for international outlets. More about John Liu

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