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
Manufacturing, I thought we were better than Intel. And customer trust, we thought that our customers trusted us more than Intel's customers, customers Intel. So, I wasn't too worried. But then indeed, and I also thought that when Jeff Williams told me the highest level of Intel, I thought he was talking about somebody like Andy Grove, who was retired of course.
But it turned out that he was only talking about the CEO of Intel at that time. Yeah. But I knew that only later.
No, it was the Italian guy. Ottolini. Paul Ottolini. Ottolini. Got it.
Yeah. All right. I wasn't too worried, but it still was in my mind. So a month passed. I think it was about the middle of February when Jeff called to tell me to pause for two months. So almost exactly a month later, March, middle of March sometime, I decided that I would pay them a visit. and ask them what's going on, any progress. So I emailed Jeff and asked for an appointment.
I said I was coming to the Silicon Valley anyway, which was pretty normal. and stop in at your place on such and such a day. Is that okay? And Jeff replied by saying that, yeah, come here, but I won't be here. I have asked Tim Cook to see you. I mean, this freedom, Jeff's freedom of delegating his boss to see a visitor, it was a privilege that I seldom had in my career, you know.
I know, I know. It was usually that way. It was usually the other way. But in this case, it was Jeff S., Well, anyway, so I showed up and Tim was very nice to me and took me to lunch or to the cafeteria, I guess, where there was a lot of food. We each picked our food and carried our tray back to his office, you know.
And anyway, he told me, there's nothing to worry about because Intel just does not know how to be a fountain. That's a very short, but a very satisfactory answer to me.
I was explaining to you that we had on technology, on manufacturing. Subconsciously, I think, I interpreted Jeff's explanation to me to be the third one, customer trust. I mean, they were always very superior, you know, 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.
None of them liked Intel. None of them. Intel always acted like they were the only guy. They were the only guy for the microprocessors.
Yeah, but I really don't think Tim meant that. I think he meant that the customer asks a lot of things. We have learned to respond to every request. Some of them were crazy. Some of them were irrational. We had to respond to each request courteously, which we do. Intel has never done that. Intel, I mean, I said I knew a lot of customers of Intel's here in Taiwan.
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.
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.
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.
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.
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?
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