Chairman Chang: TSMC leaves nothing to chance

As TSMC Chairman and Founder Dr. Morris Chang made his way up the steps and across the stage on Tuesday morning to keynote at the opening of his organization’s 19th annual global tech tour, the ballroom in the San Jose Convention Center was plunged into silence, one imbued with a palpable sense of both reverence and awe. There were easily a thousand people in the room, but nary a sound. It was astonishing.

Chang positioned himself at the microphone centered on the broad stage and then delivered an equally astonishing twenty-minute address, without notes and only one or two slides. First, he acknowledged his audience …

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It is always a pleasure once a year to be here in Silicon Valley and to have the privilege of saying something at the opening. I usually give the industry outlook.

Last year was not so good. There was a contraction of 2-to-3 percent, however our customers did better than the overall industry. Our customers’ stock prices outperformed the Philadelphia Stock Exchange Semiconductor Index. Nonetheless, last year no one did particularly well, although overall our customers did better than most.

This year, we are forecasting instead a 4-percent growth for the whole industry, but even more growth for the fabless companies. Most of our customers are fabless – they dominate several segments including baseband, tablets, smartphones, connectivity applications, hard-disk drives – and our customers will probably enjoy 9-percent growth this year.

In support of our customers, our own business will also do well. TSMC expects double-digit growth in the teens this year. However, our success will be measured on more than just numbers: Our mission is to be the trusted and capacity provider to the industry.

These words – trust, technology, capacity – are all important. We have been hard at work increasing high-yield capacity, getting to the next node, and broadening applications of our technology.

I have said in the past that Moore’s Law will go on, and we will be there. If anyone is to oversee the continuation, we will oversee it!

We have doubled our R&D expenditures in the 4 years since 2009, from $.7 billion to $1.6 billion. Note that just 10 of our top customers plus TSMC – these 11 companies have spent more on R&D than the top two IDMs combined.

In the same period, we have increased our capital expenditures from $2 billion in 2009 to over $9 billion this year. Today, our logic capacity is the largest of any company in the world, larger than Intel’s in terms of wafers and much larger than Samsung’s.

Aside from these expenditures, however, there is one big concept – our Grand Alliance with key equipment and material makers [evidenced by the fact that] we have invested over $1 billion in ASML.

TSMC knows it is important to use everyone’s innovation – ours, that of the equipment makers, of our customers, and of the IP providers. That’s the power of the Grand Alliance. It defines the Grand Alliance as we relentlessly pursue our mission.

We want to earn the trust every day of our customers through good service, and by being a good partner. Most importantly, we will never compete with you! That has been our business model since we were founded.

We want to win your trust, to build your technology, to support you!

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And with those words ringing out into the silence, Morris Chang turned and walked off stage.

The ballroom erupted into applause.

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Tags: Morris Chang, TSMC, TSMC's Grand Alliance

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