Dr. Morris Chang
speaker
200 appearances
1 recordings
1 series
first heard Jan 2025
last heard Jan 2025
Dr. Morris Chang’s voice in public audio — every appearance, attributed to the second.
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Appearances
Good. I was like you, you know. Like 40 years ago, I was like you. I don't play anymore. But, you know, so I know the feeling of hitting a ball in the sweet spot, you know. 28 nanometer is in the sweet spot. And so I said, why? He, you know, gave me a lot of technical reasons, 20 nanometer. So I decided I would believe him. And he now had the resources to push it, to do it as fast as he could.
So, you know, now the capital spending. Now, of course, back then we had already built up a pretty good infrastructure, organizational infrastructure. We had a pretty good market forecasting And I had set up the business development department, which was like a marketing department. 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. Now, from all these inputs, the marketing, the business development department, which, as I said, was our strategic marketing group. And from the technical, from the R&D side, that 28 was going to be a sweet spot.
I decided that, and I quote Shakespeare in my autobiography, that there's a tide in the affairs of man, which taken at its flood leads on to fortune. I decided that. This was 28 nanometer was going to be our tide. Our next tide anyway. There will be others. Seven nanometer was another, was the next sweet spot, the Andean people told me. And again, you know, reminded myself of,
Shakespeare, you know.
Taking it at the flood, yeah. So, I mean, that took, however, you know. I mean, setting the R&D at 8% 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. Our practice in the board meetings, because back then, or even now, most of the directors are from overseas. US and England.
And we would email the agenda to them two weeks before the board meeting. Then the night before the board meeting, I would invite the independent directors to dinner. And that dinner, the conversation at that dinner was not on record. So the independent directors, actually three quarters of our directors were independent, are independent directors.
Anyway, so in the night before and the evening before the meeting, they had the opportunity to ask me questions if they had any. But on this matter of vastly increased capital spending, they didn't even wait until they got to that point.
Yeah. And so they called the chief general counsel. The general counsel is also the secretary to the board. They called him, at that time he was an American, the general counselor was an American, and said, we want to talk to the chairman. We don't like this idea at all. Anyway, so I talked to them on the phone. about a week or so before the board meeting.
And, all right, you know, this is something that, of course, I told them what I have now just told you, inputs from market forecast, inputs from our R&D, inputs from our business department, the new business department. And of course, you know, they didn't believe it. You really can't convince anybody on something like this.
So at the end, I had to say, well, look, I heard you, but I am still the guy that's responsible for the operation of the company. So you need to let me go ahead with this one. So they were satisfied with that.
Oh, I think you know the result. That was good.
No, I didn't. Maybe the business development guy, 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. But I mean, of course, this was not the only, it was not the only input, you know. I had a few other advisors too, yeah.
Yeah. But before we do that, let me offer how we made CC, actually, the business development director. Ah, the current CEO. The current CEO. The current chairman and CEO. When Rick was the CEO between 205 and 209, he had split operations into two groups, advanced technology and mainstream technology. And C.C. was the head of the mainstream. actually really, I should say, the lesser one.
And Mark Liu was the head of the advanced. And each group had a small business department section, maybe 30 or 40 people each. All right, so I came back to be the CEO, and I never thought the split up of two groups was a good idea anyway. In fact, back in 1996, The president, he was not a CEO, but he was the president. We didn't have the CEO title back in 1996.
But the president, who was American. Don Brooks? Yeah, right. He wanted to... He got a little, I think, he got a little tired of running this company. He was going to be here for only a year at first, but he winded up, he ended up spending six, seven years in Taiwan. Towards the end, he was getting a little tired of running this thing. And he thought that he would do it like TI, for instance.
TI had a germanium transistor department, silicon transistor department, integrated circuit, bipolar integrated circuit, MOS integrated circuit, you know. It's the divisional org structure instead of a functional org structure. Right, right, yeah. But I really did not think that the foundry business, TSM Seasprings, was suitable for the divisional structure.
Because, you know, we have almost the same group of customers. how do you divide up the group, divide up the company if you want the so-called divisional structure? Well, You know, Don Brooks was going to divide it by a fab, you know. My goodness, you know. The customers moved from one fab to another. The same customers, you know.
Back then, of course, he only had three or four fabs, you know. Back then, yeah. But he was not convinced. He kept arguing. And I said, look, why don't we get a consultant? McKinsey. McKinsey. Why don't we get McKinsey? Okay. So we got McKinsey in.
And McKinsey, after a month or two, two months actually, and a couple million dollars, I guess, told us the same answer, you know, that functional is best. And then Don Brooks said, Well, tell me one company, one big company that's functionalized. And McKinsey immediately answered Boeing, which is a good answer, you know.
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