[Apple Shockwave](29) TSMC Morris Chang's 'Humiliation'... Calculator and Movie ET

Maurice Chang, TSMC Founder, Thrives at Texas Instruments
Fails Final Goal of CEO Promotion
Struggles with Frustration Leading Calculator and Toy Division
Eventually Leaves U.S. for Taiwan After Persuading Taiwanese Government
Failure Becomes Foundation for TSMC Establishment
Two Semiconductor Legends Written at Texas Instruments and TSMC

Editor's Note[Apple Shockwave] is a content series that explores the upheaval caused by Apple entering the semiconductor market. You might wonder why Apple is involved in semiconductors. Apple is no longer just a company that makes smartphones and computers. After long efforts starting from the late founder Steve Jobs, Apple has designed world-class semiconductors used in mobile devices. If Intel was the leader in the PC era, Apple has become the top predator in the semiconductor ecosystem of the mobile era. Amid the global semiconductor supply chain crisis and massive investments in semiconductor production facilities, we will carefully examine the upheaval and prospects in the semiconductor market brought about by Apple Silicon to broaden our readers' insights. Apple Shockwave will visit readers every Saturday. After more than 40 installments, it will be published as a book.

"It felt like being thrown into a wasteland." (Morris Chang, founder of TSMC)

"There are many successful people in the world, but true heroes are rare. There is a difference between success and impact. Considering career, philosophy, TSMC, strategy, and core values, Morris is an academic embodiment of the industrial revolution." (Jensen Huang, founder of Nvidia)

In 1983, a man who lost a dream he had hoped for over 20 years. A semiconductor engineer and executive who lost everything and was pushed out of his company became an engineering hero at his alma mater Stanford University about 30 years later in 2012. This is Morris Chang, founder of TSMC. The only Asian individuals inducted into the Stanford Engineering Hall of Fame are Chang and Jensen Huang, founder of Nvidia. Expanding to the semiconductor field, there are only a few such as Craig Barrett, former Intel chairman, and Marcian Ted Hoff, who designed the first microprocessor Intel 4004. Chang and Barrett were inducted into the Stanford Engineering Hall of Fame in the same year. Following Robert Noyce, Gordon Moore, and Andy Grove, the CEOs who led the CPU era at Intel and Chang, who created a new industry called foundry, were evaluated on the same level.

Stanford University selected Morris Chang, founder of TSMC, and Craig Barrett, former CEO of Intel, as Stanford Engineering Heroes in 2012 and introduced them. Photo by Stanford University website

Stanford University, the foundation for producing Silicon Valley talent and leading figures in the semiconductor industry, would not lightly give such an evaluation of Chang.

Stanford described Chang as "a pioneer of the dedicated integrated circuit foundry model." It said he wrote two legends in semiconductors. And this passage was added.

"After completing his studies at Stanford, Chang returned to Texas Instruments (TI) and introduced a semiconductor strategy that sacrificed early profits to increase market share and pursue long-term gains."

This means Chang was the first to introduce the chicken game in the semiconductor market, where large-scale early investments, volume offensives, and price cuts were used to defeat competitors. This strategy, which began in the 1960s, has now become the industry standard. Chang made TI the largest and most profitable chip manufacturer of that era.

Since joining TI in 1958, Chang relentlessly advanced toward his goal of becoming CEO. It is well known that he rode the elevator of rapid promotion by dramatically improving TI's semiconductor production yield. Despite winning competition against the giant IBM and serving as vice president of the semiconductor division, little is mentioned about why he left TI.

The Republic of Texas used the red, white, and blue Lone Star flag. The Republic of Texas fought a war of independence against Mexico and voluntarily joined the United States in 1845, becoming the present-day state of Texas.

TI's headquarters are in Dallas, Texas. Texas is one of the most unique states in the U.S. Texans are famous for their strong pride. In Texas, the 'Lone Star' flag is flown as much as the national flag. The author vividly remembers being surprised by the Lone Star flags when visiting AMD's fab in Austin, Texas.

Although recently more diverse populations have moved in, it remains a predominantly white, conservative region. Moreover, thanks to oil, both individuals and the state treasury are financially strong. Pride is naturally high. Under these regional conditions, it was impossible in the early 1980s for an Asian, not even Japanese but Taiwanese, CEO to emerge in a Fortune 500 company. In 1982, when Chang was wandering, the IT companies ranked in the top 100 of the Fortune 500 were IBM (8th), AT&T (22nd), Xerox (42nd), and TI (91st). Not a single Silicon Valley company was ranked. HP, the father company of Silicon Valley, was 110th, and Motorola, which made the first cellphone, was 126th. This indicates how significant TI's status was. There was no place for an Asian CEO at TI.

Asians lost in internal politics. Although they attended top U.S. schools like Harvard and Stanford and achieved great results, becoming CEO of a major American company in the conservative southern U.S., especially Texas, was like throwing eggs against a rock.

Chang dreamed of becoming CEO of TI as a semiconductor expert, but reality was harsh. It was impossible to surpass the status of Mark Shepherd, chairman and team leader when Jack Kilby developed the first IC.

The first solar-powered calculator made by Texas Instruments (TI). Since then, the company has introduced engineering calculators and educational calculators. Educational calculators virtually dominate the U.S. market. Photo by TI website

Chang's final years at TI were miserable as a semiconductor engineer. He was moved to be responsible for the consumer products division. A semiconductor expert was assigned to manage the calculator business. TI had begun to focus on consumer products using semiconductors, but the consumer products division was much smaller than the semiconductor division. It is easy to understand the sense of defeat he must have felt when suddenly responsible for calculator production instead of semiconductor development and manufacturing.

TI produces consumer devices besides semiconductors. Since the late 1970s, TI began focusing on consumer devices using its own semiconductors. Calculators are a representative example. TI calculators are essential supplies that American high school students must buy at the beginning of the semester. Math classes in the U.S. use calculators. TI calculators, which early captured this market, became the standard in education. TI calculators are even required in the SAT, the U.S. college entrance exam.

Chang also led a toy product at the time: Speak & Spell. Speak & Spell was a product based on speech synthesis semiconductors. When a word was entered on the keyboard, it spoke the word aloud.

The Speak & Spell toy manufactured by Texas Instruments, where Morris Chang was in charge, became a big sensation following the success of the movie ET. Photo by YouTube

The blockbuster movie 'ET,' which featured Speak & Spell, is not a pleasant memory for Chang. In the movie, the toy Speak & Spell appears as a communication tool between ET, humans, and even ET's home. It was a toy made to utilize the speech synthesis semiconductor produced by TI in 1978. When a word was typed on the keyboard, the toy pronounced it. Chang said the toy was quite successful. Although Speak & Spell received great attention along with the movie, could Chang, who devoted his life to cutting-edge semiconductor production, have enjoyed the spotlight on such a device?

Chang's disappointment at the time can be confirmed in various lectures and interviews.

"I felt like I was thrown into a wasteland."

Chang left TI without any future plans. He divorced his wife, whom he married when he joined TI. He had enough reasons for a fresh start. The 20 years of Chang's TI era as a semiconductor engineer were glorious moments, but the last few years were moments he wanted to forget. Chang briefly worked at a company called Global Instrument but soon resigned and accepted the Taiwanese government's invitation to head to an unfamiliar land.

If Chang had become CEO of TI and had not returned to Taiwan, what would the semiconductor industry look like now? It is highly likely that the foundry industry as it exists today would not exist. Qualcomm and Nvidia might not have found fabs to manufacture their semiconductor designs. AMD, lacking financial power, might still have been a second-tier company overshadowed by Intel due to insufficient fab investment. The appearance of Apple Silicon would also have been different from what it is now.