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Business

Morris Chang gives successors a legacy of driving change

The past 30 years have been full of dances with new innovations for TSMC

Morris Chang, founding chairman of TSMC, established a new business model where it manufactures semiconductors for other companies. (Photo by Shinya Sawai)

HSINCHU, Taiwan Three days after Morris Chang announced his retirement and a succession plan on Oct. 2, shares of Taiwan Semiconductor Manufacturing Co. hit an intraday record high of 225.50 New Taiwan dollars.

Many technology executives and industry analysts credit the company's fortunes to the 86-year-old Chang, who started the Taiwanese chipmaker in 1987. They cite his vision, long-term outlook, and the unrivaled team of semiconductor experts he has assembled over the decades.

With a doctorate in electrical engineering from Stanford University and executive experience with U.S. chipmaker Texas Instruments, where he worked from 1958 to 1983, Chang was invited by the Taiwanese government in the 1980s to build a world-class chip industry on the island.

Chang was born in the Chinese city of Ningbo in 1931 and moved to as many as six Chinese cities including Hong Kong with his family before the age of 18. After studying and working in the U.S., he relocated to Taiwan in 1985.

TSMC factory   © TSMC

He is best known for his creation of the chip foundry business, manufacturing chips for other companies, and helping to foster a large number of other semiconductor suppliers in Taiwan. He is widely recognized as the godfather of Taiwan's semiconductor industry, the world's No. 2 after the U.S. by revenue, and a leader of the global chip industry. Before TSMC dominated the field, technology companies made chips and other components in-house by their own designers.

"In the first decade of our company's history, we established our market in the U.S.," Chang told the Nikkei Asian Review in an interview on Oct. 5. "In the second decade, we established ourselves in the PC and graphics card business. In the third decade, we secured mobile device business."

Chang has a reputation of being astute enough to ensure that his company is producing the most advanced chips to meet market demand.

TSMC controls 56% of the global market for contract chip production, and is the sole supplier of chips for Apple's newest iPhones. Chang is also credited with driving TSMC's innovation, without which Apple likely would have found it more difficult to deliver its iPhones with the computing power they now boast.

"Without TSMC, smartphones would not have arrived as early as they did," Chang said of the company's past achievements during a press conference to announce his retirement.

Its market capitalization of more than NT$5.8 trillion ($191 billion) has more than quadrupled since mid-2009 -- it surpassed that of U.S. chip manufacturer Intel in March and now rivals that of Toyota Motor, Japan's largest company. The company's revenues and net profits have hit new highs every year since 2012, and it has been the most profitable company in Taiwan since 2004.

Industry observers who follow TSMC say that Chang's shoes will be difficult to fill. "Morris Chang is irreplaceable for his relationships and ability to lead the business," said Randy Abrams, an analyst at Credit Suisse.

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