TSMC Founder Morris Chang
Sunday, 26 January 2025 · 2 min read · Listen to the episode ↗
In this podcast episode, TSMC founder Morris Chang shares insights on his enduring partnership with NVIDIA, emphasizing long-term relationships over short-term gains. He discusses the strategic importance of R&D investment, particularly in AI chip technology, and the significance of the fabless model in the semiconductor ecosystem. The conversation also highlights TSMC's unique role as a dedicated foundry supplier, adapting to industry demands while addressing challenges from major clients like Apple and the impact of evolving technology on market dynamics.
The podcast episode features Dr. Morris Chang, the 93-year-old founder of TSMC, in conversation with Jensen Huang, CEO of NVIDIA. Dr. Chang discusses his early interactions with Huang in 1997, when NVIDIA was a struggling startup seeking a foundry. Their partnership flourished as TSMC began manufacturing NVIDIA's chips, which helped save the company from bankruptcy. Dr. Chang emphasizes the importance of maintaining a stable workforce and resolving customer issues, prioritizing long-term relationships over short-term cost-cutting measures.
He reflects on challenges faced in 2009, including quality and yield issues that affected NVIDIA's production. During this time, he returned to the CEO position and focused on addressing these problems. Dr. Chang also recounts a significant dispute with NVIDIA that required extensive negotiation, ultimately leading to a settlement that preserved their partnership.
As TSMC transitioned to the 28-nanometer node, Dr. Chang recognized the need for increased investment in research and development, establishing a fixed R&D budget of 8% of revenue. This decision coincided with a substantial increase in capital expenditures to support the 28-nanometer technology, positioning TSMC as a leader in the semiconductor industry.
Dr. Chang discusses the strategic relationship with Apple, detailing the challenges TSMC faced in meeting Apple's demands for chip production. He recalls the dilemma of accommodating Apple's request for a shift to 20 nanometers, which complicated TSMC's production plans. Despite the challenges, TSMC ultimately became the sole supplier of chips for Apple, marking a significant shift in the semiconductor landscape.
The conversation highlights TSMC's unique position as a dedicated pure play foundry, allowing it to focus solely on manufacturing without competing with its customers. Dr. Chang reflects on the early days of TSMC and the evolution of the fabless model, which has become a significant part of the semiconductor landscape. He also discusses the impact of ARM's architecture, which enabled a separation of design and manufacturing, creating opportunities for various players in the industry.
The podcast emphasizes the interconnectedness of the semiconductor ecosystem, particularly in Taiwan, where TSMC and its partners collaborate closely. Dr. Chang's foresight in recognizing the potential of fabless companies and his strategic decisions laid the groundwork for TSMC's eventual dominance in the market.
The discussion touches on the escalating costs of building new fabs and the natural monopoly characteristics of the semiconductor market. Dr. Chang highlights TSMC's ability to invest heavily in capital expenditures and R&D, particularly in proprietary technologies for AI chips. The hosts conclude by noting that while Moore's Law may face physical limits, the demand for computing power continues to grow, driving innovation in the semiconductor industry.
This summary was generated from the episode transcript and can contain mistakes.