The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 43 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Chang: Tim Cook told me in 2011 that Intel cannot run a foundry
“And anyway, he told me there's nothing to worry about because Intel just does not know how to be a Foundry.”
Morris Chang: Mark Liu declined TSMC BD role due to small headcount
“So, I, ah, first offered the marketing, ah, business development job to the guy who was in the Bigger job, advanced technology, Mark. And I explained to him that I did not think he had had any significant marketing experience in the past, and this would, this …”
Chang: None of Taiwan's PC makers liked dealing with Intel
“Before this Apple thing, Apple and we, before Apple became our customer, I knew a lot of Intel's customers in Taiwan. You know, all the PC makers are Intel's customers. I mean, they, none of them liked Intel. None of them.”
Chang: 2009 TSMC CEO retake was triggered by 600-700 performance layoffs
“Another problem was the immediate one that triggered me to retake the CO ship because the previous CO had laid off, except he didn't use the term laid off, you know. He used the bad performance review, the worst performance review people, and there were about …”
Chang: Layoffs based on supervisor performance reviews lack credibility
“People would not respect us if we lay off by performance ratings.
[1196] Ben Gilbert: And why is that?
[1198] Morris Chang: Because it's very subjective. Performance reviews, the performance ratings are done by everyone's own supervisor. So, the 700 was perf…”
Chang: Companies needing workers back within one year should not do layoffs
“If in a year you have to hire people back, you have to hire the laid off people back, then you shouldn't lay off, because the layoff, the separation expense is usually half a year, about half a year, and it takes at least half a year to train a person. So if y…”
Chang: TSMC's 2009 CEO circumvented board approval by framing layoffs as performance dismissals
“So I said to him, if you want to lay off, bring it to the board. I'll call a special board meeting. And I knew what I would ask the board to do, you know, which was not to grant the permission. That's right. But he decided to circumvent that, the CEO, you know…”
Morris Chang: China heavily subsidized and took control of solar manufacturing
“The solar business could have been pretty good. However, China ruined it. They subsidized the hell out of it. And they now control that business, solar cells.”
Chang: TSMC Offered NVIDIA Over $100M with 48-Hour Deadline
“Yes. More than a hundred million. And I also said, our offer is effective, 48 hours. If you do not, there is not going to be, we are not going to argue, we are not going to bargain. If you don't accept the offer within 48 hours, we will have to go to an arbitr…”
Chang: Previous TSMC CEO Offered NVIDIA Zero Dollars in Dispute
“The previous CEO did not even give him a number, you know. The previous CEO gave him zero.”
Morris Chang: Semiconductor foundries are unsuitable for divisional organizational structures
“I really did not think that the foundry business, TSMC's business Was suitable for the divisional structure. Because, you know, we have almost the same group of customers.”
Morris Chang: Non-executive chairmen should only intervene if the company risks collapse
“My principle, when I was, ah, The chairman and not the CEO, ah, was, well, sometimes you have to let the CEO make his own mistakes and learn from them, you know. Ah, of course, ah, not if the whole company is going down the drain, drain, so you have to interfe…”
Chang: TSMC matched Intel in technology and beat it in manufacturing in 2011
“Technology. At that time, we thought we were almost at par with Intel. Almost. In fact, I thought we were, I think I thought we were at par with Intel at that time. Manufacturing. I thought we were better than Intel. And customer trust. We thought that our cus…”
Chang: Co-developing tech with senior partners destroys internal R&D capability
“The company that co-developed something with them will send its engineers to IBM, you know. And when we do that, we lose our ability to develop our own process. We'll have to depend on this co-development thing.”
Chang: TSMC rejected IBM co-development deal that UMC accepted and regretted
“So we declined without having to think about it at all. We declined the IBM office. And IBM, in fact, was quite angry, you know. I mean, they thought we're still a small Taiwan backward place, you know. It's a Taiwan company, and they are going to pick IBM. So…”
Chang: Replaced TSMC CEO kept same pay, grade, and successor status
“Well, as far as the CO is concerned, I didn't keep him. I had More than one nice talk with him. I intended to, and I told him that he was still a potential, ah, successor to me. So I kept him at the same job grade, we have job grades, and the same salary and b…”
Chang: TSMC fixed R&D spending at 8% of revenue through recessions
“So I almost just literally picked a number out ahead.
We've been running six or seven percent already.
So I said, oh, let's pick eight percent.
Okay.
Yeah.
Eight percent, regardless of
Whether there's a recession or not.
And it's just eight percent of revenue…”
Chang: TSMC board questioned suddenly tripling CapEx for 28nm
“Setting the R&D at eight percent of did not, Invite any opposition from the board, but suddenly increasing capital spending, threefold, I think, did invite a lot of questions from the board.”
Chang: I did not foresee how big smartphones would become for 28nm
“No, I didn't. Maybe the business development guy, I mean, that was another interesting story. Yeah, maybe he knew. Maybe he, or at least, I now hope and I, of course, hoped at that time, too, that he had a more detailed visibility than I did”
Chang: Apple's initial TSMC pitch proposed a 40% gross margin
“He did say that we will let you have a 40% gross margin, and I think, well, I didn't say anything. I didn't answer him. I didn't respond to that, but our margin at that time was already 45%, and I was trying to put it up to 50%.”
Chang: TSMC funded Apple ramp via debt and filled half their requested volume
“What we first did our financial planning and we decided not to cut dividend. We decided not to sell new stock. We decided to just borrow. And I mean, this was also with consultation with Goldman Sachs, you know, we chose following. How much? I looked at the nu…”
Chang: Eliminating TSMC's dividend for Apple would have crashed the stock
“About one-third of our investors, shareholders, are very seriously interested in the dividends. So if we do what the Jeff Williams said, oh, a stock is going to drop like hell, you know.”
Chang: Apple placed initial 16nm chip orders with Samsung over TSMC
“I mean, it was a real shock when I heard that Apple had placed their first orders of 16 with Samsung.”
Chang: TSMC's Scale Exceeded Expectations, But Not by an Order of Magnitude
“TSMC's size and importance exceeded my expectations, but not by an order of magnitude, you know.”
Chang: NVIDIA became a top-five TSMC customer within three years
“Within two or three years, they were, they did become one of the biggest five customers.”
Chang: TSMC historically used six-month probations rather than layoffs
“Well, we never did that, you know. I mean, the worst we would do was to put them on, place them on probation for six months, and quite often, you know, at the end of the six months, everybody would go back to the, to his or his or her old job, and some of them…”
Morris Chang: TSMC's LED venture failed due to restrictive patent concentration
“LED did not take off either, because LED, it's not, the market is not as big as solar. However, it's controlled, the patents are controlled by just a few companies. And they wouldn't let the few companies that control the patterns of LED were not let up at all…”
Morris Chang: Sales is tactical with customers, marketing is strategic to the world
“You know, we always had a pretty strong sales effort. But to me, sales effort is just the tactical side with the customers. Marketing is the strategic side to the outside world now.”
Chang: Power comes from strategic proximity, not headcount, much like Kissinger
“Actually, back in my mind, I was thinking of the time when Kissinger was Nixon's national security advisor, and somebody else whose name I have even forgotten was the Secretary of State. And Kissinger, you know, probably had a couple hundred people reporting t…”
Chang: Apple rejects unprompted supplier pitches until they are ready
“Apple is a very close mouthed company. If you try to talk with, if you offer, you know, your service, I mean, they will just tell you to go away, you know. They will come to see you when they are ready, you That's what I knew about Apple, even then, and I knew…”
Chang: TSMC led foundries at 28nm, but trailed Intel
“At 28 nanometers, we were very definitely the leader among foundries. Yeah. And maybe among a few other companies such as Texas Instruments and so on, but not Intel.”
Chang: Apple was not actively considering Intel foundry in 2010
“No, Apple Was not actively considering intel. That came later.”
Chang: TSMC R&D could not develop two nodes concurrently in 2010
“The point is that back then, R&D did not have enough resources to do two notes at the same time. Later we did. Later we did.”
Chang: TSMC did not include Apple in 28nm capex expansion
“Because when we figured a very big market for 28 and therefore when we planned to increase vastly our capital spending, we didn't have Apple in mind. We didn't include Apple. Apple came strictly as a present surprise.”
Chang: Committing to 20nm delayed TSMC's 16nm development
“We, our R&D was not strong enough to do two nodes at the same time. Now we are. But back then we weren't. So, the trade-off of accepting the 20 node technology was that we delayed our 16 node Development.”
Chang: TSMC launched 16nm six months later and won most Apple orders
“We developed, we had our own 16 about half a year later, and most of Apple's 60 nanometer requirements still belonged to us.”
Chang: Refined BCG's learning curve theory at TI for semiconductor manufacturing
“I really did not develop. I certainly did not initiate it. I think I had a role at TI. I had a role in refining it to the point where a semiconductor company can use it effectively.”
Chang: Foundries demand running one standardized factory for many diverse customers
“The difficulty was, you know, you have to satisfy a lot of customers, you know, and everyone, you know, wanted the factory to run his way, you know. But you can only run for one way, you know, which will satisfy more or less all the customers. And the advantag…”
Chang: TSMC salespeople were instructed to never ignore small customers
“I had always told our salespeople that that we should never be negligent in talking to future customers, even if the customer seems to be a very small one.”
Morris Chang: TSMC exceeded $1 billion in revenue in 1995
“We had exceeded, I remember we had exceeded the one billion U.S. Dollars in revenue in 95, and this was 97.”
Chang: Texas Instruments repeatedly rejected raising semiconductor R&D to 5.5% of revenue
“At that time, when I was the head of Worldwide Semiconductors, our R&D budget,
Was, 4.8% of revenue, of our revenue, and I thought it was not enough.
I just wanted to raise it to 5.5% of the revenue, but my request was denied all the, every time I raised it.”
Morris Chang: TSMC used 'business development' because of its Chinese translation
“I decided to use business development in English because it has a good translation in, in Chinese.”
Chang: TSMC gross margins crossed 50% after his retirement
“Now, of course what happened later was that there was COVID and so on, and also we began to have leadership, technology leadership. So our margin, you know. Jumped up to over 50%, but when I retired, I was still short of 50%, slightly short of 50%. I was almos…”