Taiwan’s Richest: Morris Chang, Pioneering Chipmaker
Morris Chang, a legendary figure in the chip industry, makes his debut among Forbes
Asia’s new list of Taiwan’s 50 Richest at age 85, after shares of Taiwan Semiconductor Manufacturing hit an all-time high in June. Chang, who is worth $930 million based almost entirely on his 0.5% stake in TSMC, is the oldest person in at least two years to join any of the 12 Forbes Asia regional wealth lists.
While it’s his first time among the island-nation’s richest, it is not his first recognition from Forbes. The international edition of Forbes put Chang on the cover as “The Catalyst” in 2001. He again appeared on the cover of Forbes Asia in 2012, when he was named Businessman of the Year. Meanwhile the New York Times has called Chang the Silicon Godfather and hailed him as the man behind Taiwan’s rise in the semiconductor industry.
It has been a storied journey. Born in mainland China, Chang moved to Hong Kong during the Chinese Civil War and then to the U.S. for his education.
He got his bachelor’s degree and a master’s degree in mechanical engineering from the Massachusetts Institute of Technology.
He then spent most of a quarter of a century working at Texas Instruments, a pioneer in the semiconductor industry, in the U.S. His employer sent him to Stanford to get his PhD in electrical engineering, which he earned in 1964. He returned to Texas Instruments, where he came up with the strategy of low pricing of semiconductors to gain early market share. By 1983, he was group vice president responsible for TI’s global semiconductor business.
Chang, who is a U.S. citizen, spent a brief stint as president of General Instrument Corp. and then moved to Taiwan in 1985 to head the government’s Industrial Technology Research Institute. Two years later, he became chairman of a commercial spinoff called TSMC. “I thought Taiwan at that time posed a challenge that was new to me,” he told Forbes in 2012.
It was around this time that Chang came up with a new innovation that would revolutionize the semiconductor and electronics industries. Before the 1980s, suppliers of chips for everything from computers to radios mostly spent big sums to design chips themselves and make them in their own factories. Chang’s idea was to provide specialized factory services (also called a “foundry”) for companies willing to outsource production. This model has allowed engineer entrepreneurs to enter the field at a much lower cost and helped spur innovation.
Under Chang, TSMC’s business took off. He listed the company in Taiwan in 1994 and it became the first Taiwanese company traded on the New York Stock Exchange in 1997. Chang stepped down in 2005 and handed the reins to Rick Tsai.
But things didn’t go as well as Chang hoped--stagnating instead, he told Forbes. By the time the global financial crisis hit in 2008, things had gotten worse. Laid-off staff turned up in front of Chang’s house to complain. Chang, who was chairman at the time, shocked investors by returning to his post as CEO at age 78 in 2009.
A Second Wind
Chang’s hard work paid off. TSMC’s shares hit a ten-year high in 2012. A year later he retired for a second time as CEO but held onto his role as chairman. The company hasn’t missed a beat, with its revenues, profits and shares soaring recently. TSMC remains one of the largest semiconductor companies in the world, supplying chips to companies like Qualcomm, Nvidia and Apple.
Revenues hit $31 billion in 2016, up 86% since 2012. Net profits doubled in that same time. The world’s largest semiconductor foundry, TSMC manufactured 9,275 different products using 249 distinct technologies for 449 different customers in 2016.
Thirty years after its founding, TSMC still holds true to Chang’s original vision, staying away from designing, manufacturing or marketing semiconductor products under its own brand name so it can avoid competing against its customers. For Chang and the company, that deferential strategy has proven a wise choice.