Dr. Morris Chang

And none of them, they all wished that there were another supplier. None of them either trusted Intel or liked Intel.

And none of them, they all wished that there were another supplier. None of them either trusted Intel or liked Intel.

Well, it might have cost, but yeah, the story certainly does not end here. All right, so there was pricing. Everything was not easy. Pricing, and Jeff came himself, and we talked about pricing. And we, of course, we had done our homework also on the cost and what kind of price we would accept. But Jeff came and he told us just a number, you know. Well, he gave us his reasoning.

Well, it might have cost, but yeah, the story certainly does not end here. All right, so there was pricing. Everything was not easy. Pricing, and Jeff came himself, and we talked about pricing. And we, of course, we had done our homework also on the cost and what kind of price we would accept. But Jeff came and he told us just a number, you know. Well, he gave us his reasoning.

He had to make his component costs meet a certain goal also, yeah. But anyway, that was settled. And Jeff said, ah. And when the pricing was settled, I said, let's go out to dinner. go to a Taipei three-star restaurant for dinner. And Jeff jokingly said, ah, if you didn't like the pricing, we will probably be going to a McDonald's. Which was never in my mind, but he said that.

He had to make his component costs meet a certain goal also, yeah. But anyway, that was settled. And Jeff said, ah. And when the pricing was settled, I said, let's go out to dinner. go to a Taipei three-star restaurant for dinner. And Jeff jokingly said, ah, if you didn't like the pricing, we will probably be going to a McDonald's. Which was never in my mind, but he said that.

Sure. The cost, yeah. But the main thing that goes into pricing, of course, is the cost. And then the second thing is, of course… whether your desired price will be accepted by the customer.

Sure. The cost, yeah. But the main thing that goes into pricing, of course, is the cost. And then the second thing is, of course… whether your desired price will be accepted by the customer.

Yeah.

Yeah.

Well, I don't get the privilege of sorting it out now, you know. CC, CC way, I think, has the pressure and the duty of sorting that out. Yeah. Well, I mean, as a general principle, you know… you try to find a kind of a middle ground, which is different for every CEO. Even though every CEO who wants to protect his reputation, every CEO says, ah, I worry about the long range.

Well, I don't get the privilege of sorting it out now, you know. CC, CC way, I think, has the pressure and the duty of sorting that out. Yeah. Well, I mean, as a general principle, you know… you try to find a kind of a middle ground, which is different for every CEO. Even though every CEO who wants to protect his reputation, every CEO says, ah, I worry about the long range.

But in truth, not everyone does. So it's a very personal how to sort these things out. I think it's a very personal issue. Now, for a lot of CEOs, there's really no choice. You have to, as a supplier, you have to accept a certain price. If it's a commodity particularly, you know. We have not finished with Apple yet.

But in truth, not everyone does. So it's a very personal how to sort these things out. I think it's a very personal issue. Now, for a lot of CEOs, there's really no choice. You have to, as a supplier, you have to accept a certain price. If it's a commodity particularly, you know. We have not finished with Apple yet.

Yeah. Now, I think you were asking whether there was any… Trade-offs. Trade-offs. Well, the trade-off, there was a pretty significant, serious trade-off. And that was a detour that I said we took at that time back in the… 2011, 2012 time, our R&D was not strong enough to do two nodes at the same time. Now we are, but back then we weren't.

Yeah. Now, I think you were asking whether there was any… Trade-offs. Trade-offs. Well, the trade-off, there was a pretty significant, serious trade-off. And that was a detour that I said we took at that time back in the… 2011, 2012 time, 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 And then Samsung came up with the 16. They had lost the 20 business, you know. So they were ahead of us in the 16 nanometer development. Because they got to skip 20. Yeah, because they didn't get the 20, okay. They need to develop 20. So I got a shock. I mean, it was a real shock.

So the trade-off of accepting the 20-node technology was that we delayed our 16-node And then Samsung came up with the 16. They had lost the 20 business, you know. So they were ahead of us in the 16 nanometer development. Because they got to skip 20. Yeah, because they didn't get the 20, okay. They need to develop 20. So I got a shock. I mean, it was a real shock.

when I heard that Apple had placed their first orders of 16-worth Samsung. Now, that was a real shock. We invested so much, even though we took only half of their original demand. It was still tens of billions of dollars, I think. And we were counting on it being at least 80, 90% of the equipment being converted to 16. And now, if Apple went to Samsung for the 16, where did that leave us?

when I heard that Apple had placed their first orders of 16-worth Samsung. Now, that was a real shock. We invested so much, even though we took only half of their original demand. It was still tens of billions of dollars, I think. And we were counting on it being at least 80, 90% of the equipment being converted to 16. And now, if Apple went to Samsung for the 16, where did that leave us?