Stanford Engineering Hero Lecture: Morris Chang in conversation with President John L. Hennessy

good afternoon I'm Jim Plummer the Dean of the engineering school and I'm delighted to welcome all of you here this afternoon we're here to celebrate Morris Chang as one of the engineering heroes and this is a program that's been going on for three years now we have about twenty eight or nine engineering heroes and these are people who have a strong affiliation with Stanford many of them are graduates others are faculty who've served here for a while but they're people who change the world in various ways so we're talk a bit more about Morris in just a second but but let me begin by recognizing several other people who are here John Hennessy who is president of Stanford University also an engineer and and in just a couple of minutes Jenson Wong will get up and make a couple of remarks about Morris as well and Jensen is also an engineer in fact a Stanford engineering graduate so so unlike many of our previous engineering hero [Applause] that was that was actually in my next paragraph here but but I'll do it again good so I also wanted to note that most of our engineering hero events actually have been evening events but this one is actually being held as part of a regular Stanford class the entrepreneurial or thought leaders class and so we're delighted to have all of the students who are part of that class here to help us celebrate with with Morris this afternoon we have also a number of TSMC executives here we're delighted to have all of you with us and we also have a number of people from the global semiconductor Association including Jody Shelton who was helpful to us in organizing this event as well so the way we're going to proceed this afternoon is that the main event will be a conversation between John and Morris we'll leave time at the end for questions for those of you in the audience you might have interesting questions or comments to make but I did want to say a couple words about the about the engineering heroes program before we do that so as it's as I said there are roughly 29 people we recognized at this point as heroes of the School of Engineering the latest class of people includes the founders of Google Sergey Brin and Larry Page Sally Ride who was an astronaut and a proponent of science education and historically people like Fred Terman Bill Hewlett Dave Packard and Vint Cerf are also on our list of engineering heroes as you go at the auditorium at the back to the right there's a wall there that has a plaque actually for each of our engineering heroes so Morris is a Stanford PhD in electrical engineering and Oh since you got me off track I forgot the paragraph so I did I did want to recognize not only your wife Sophie but also Jensen's wife Laurie more delighted that Laurie could also be [Applause] so Morris is a electrical engineering PhD from Stanford and he's Jensen we'll say a bit more about him but he is I think best known worldwide really well known worldwide for transforming the semiconductor industry and it was a in some sense a single idea he had back in the 1980s that made this big transformation and at that point in time people companies that design semiconductor silicon chips and so on and by and large had their own fabrication facilities big factories so they would design them and make the chips and more has had this key insight that you know maybe with these factories getting to be as expensive as they are perhaps we could actually share the manufacturing facilities and enable more people to build these things that perhaps couldn't afford to build their own semiconductor factories so that was the origin of TSM C which is the company that today is clearly the world leader in building chips for what are called fabless semiconductor companies now the consequence of that has really been transformative because not only did it result in lower costs for many companies but it resulted in a wave of creativity and innovation because people could now start a company designed to design semiconductor chips and do it with a few people and and count on a manufacturing arm at TSMC to actually build the components that they would think about designing so he he transformed in in a very real way the same mcduck Terr industry and I'm sure John will talk a little bit about him that talked a little bit about that within this afternoon so with that brief introduction let me ask Jensen Wong who is a graduate of the also electrical engineering department here at Stanford just to save a few words because he knows Jensen he knows Morris really quite well and he was going to say a few words about his relationship with him ok good afternoon first first of all both Jim and John like professor Plummer professor Hennessy that is excuse me we're both of my professors and I don't know if any of you have been so fortunate to have been taught by either of them but I am rather the product of your work so if you're and you know so this is what it looks like when we grow up Moore's the world is full of successful people frankly but heroes are rare and I think that we understand the difference between the two there is a difference between success and impact and I'm really I'm really glad that that this is partly a class because I think that Moore's his career his philosophies TSMC its strategies its core values is absolutely a study in Industrial Revolution there is no question about it and all of you who are interested in starting companies changing the world building things that matter this this is a wonderful study of that impact there are very few companies that I know that any one of you know in fact who has had a greater impact on society as tsmc when I met Morris almost 20 years ago the concept of building semiconductors the concept of building a chip starts with build a factory the first thing you do is find R&D engineers find enough money to build a factory and if you have any money left you would actually build a new application a new chip that mattered what Moore's mores did with TSMC his insight was instead of being a product company TSMC would be a platform company it would build no product it would enable other companies to build products that incite all although so clear now potentially one of the most sustainable semiconductor manufacturing business models going forward the foundry business model was absolutely unclear then was absolutely unclear then if you look at their impact today over twenty some thirty billion dollars in sales almost a thousand customers instead of manufacturing one or a few products very very well they manufacture umpteen thousand products at a time this is a company that manufactures that makes something that I have utmost confidence right now as I speak that every single person in this audience has hidden his possession this is the only company that I know that at this moment there's something in your position possession right now that is manufactured by them I believe that to be a test that will pass whether you have an iPhone or Samsung Galaxy or an iPad or whatever it is of all of the companies you know in the world this is the only company that currently has something they make in our possession right now there are no others so there's basically air and tsmc I believe I believe that passes the test I believe that passes the test of impact but what's really amazing is this what's really truly amazing is this I met I met Morris when I was quite young and in fact I've known Morris my entire company career and video today wouldn't be here if and nor nor the other thousand fabless semiconductor companies wouldn't be here if not for the pioneering work that TSMC did and the pioneering work is not semiconductor manufacturing the pioneering work is the strategy of semiconductor manufacturing they decided there would be a platform company and in that platform company description' technology matters capacity matters pricing matters delivery commitments matter but the one thing that I took away from our meeting and I tell everybody this almost 20 years ago was when I went to see him in Hsinchu my walkaway message was one thing this is a company that had technology they had capacity their wafer prices were relatively low they promised to deliver on time but my takeaway because it said so in the brochure it said so in all of my conversations with Moore's and assess so in and everything he said over and over again was what's gonna make TSMC great is integrity and Trust and it sounded at that time when I first met you Moore's and don't take this wrong sounded a little cliche because everybody says that but here's the fundamental difference between what he said and what he meant and why it was so important to TSM see if you are a platform company and you are a platform by which other company's dreams are built from if they can't trust you you cannot be there platform it's no different than the ground we stand on a foundation we stand on a continent we build we immigrated to if you can't rely on the fundamental foundation of that country that infrastructure that platform you can't build an ecosystem above it 20 years later TSMC is not only a great company I've already talked about its impact but it's business philosophy has become so foundational to an entire industry whether it's EDA companies or IP companies that are in the audience or fabless semiconductor companies there are no industry no company no products that I know of that tsmc is not somehow involved in and it came from that singular vision that trust and integrity was foundational to their business let me just give you tell you a couple stories I have no more a long time and and I have a lot of business stories but they're not very interesting I have I have some personal stories I think you'll find interesting and it says something about his commitment and his courage hard to say hard to tell which one is which at the moment as I tell you the story you decide I think it was 19 1990 1999 you will know the date but I think it's like 1999 and it was a Friday afternoon I got a phone call my admin says Morris would like to drop by to see me on a Friday afternoon and was like might in my last meeting and I and I was expecting TSMC sales to accommodate him but he showed up by himself it was him his pencil in his black book every time he pulls out his black book had always sent chills through me not not not because not because he needed it for everybody who knows him he's impeccable with numbers he's impeccable the numbers he probably still remembers how many wafers I needed that year but he dropped by and and he wanted to see me and we talked and he asked me about business into new products and and my wafer needs for the year coming and and he wrote it down and we had a nice chat and he left nobody had TSMC knew he came I found out later that he was checking up on his customers and in this case it was me and and he was on his honeymoon and and I I am one I'm one of the few people in the world that can say I I was with Sophie and Moore's on their honeymoon that's my first story I can't tell him it's a story of commitment or courage hard to say III wanted to pick a good story that exemple or both my second story was this is just a few years ago and usually Morris sends an email says he'd like to like to chat and then we talked on the phone and he he had an announcement and this this announcement is that he is going to have a career change he is going to be the CEO of TSMC again and I and and at first at first I was happy for him and while I pretended to be happy for him and and the first thought was isn't there our driver's license that you have you need for do be a CEO of a company and he's turned thirty seventy five this is a guy who can write on his resume when I was 75 I applied for a job as a CEO and got it [Laughter] and and I you know I I think that there are many CEOs in the world there are many as successful people in the world and and we all love what we what we do we love what we built but very few people at the age of 75 or maybe it was 76 comes back to take on a massive company with global scale with just in the middle of Industrial Revolution which is doing to mobile revolution and not only that he delivered what I would estimate to be the best five years of his career and it's a little bit like Jack Nicklaus two weeks ago saying you know what I think I want to finish all the rounds of the Masters and win it so this is this is an extra yeah being a CEO as you know of a new large enterprise is mentally physically challenging I mean this is a full-contact sport and to do it to do it now and to do it the way that you've done it's really really extraordinary Maurice I want to say on behalf of everybody here that we've seen a lot of success over the years but we've never seen impact like what you've made and on behalf of all of us you're my hero [Applause] well after that I'm not sure what else we have to talk about Oh fine but let's start with the point that Jenson made the tremendous impact that TS LCEs had not only in the creation of the fabulous semiconductor industry that I think couldn't exist without without that leadership but also the tremendous impact it had on the Taiwan Semiconductor Manufacturing and really being the spearhead for the growth of that industry did you anticipate those kinds of changes when you began the company did you think you could have that kind of impact around the world no not at all John actually the very idea the new business model the pure-play foundry business model now everybody thinks that it was a pretty clever idea but at the time it was really a solution that was looking for a problem because as Jensen said it would say it was meant to be a platform the problem was that at the time nobody needed a platform there were very few fabless companies being existence at that time there were maybe 20 some fabulous companies now even those fabulous companies did not think that they needed a tsmc it may they they felt that they would rather go to Toshiba an easy Hitachi Fujitsu or even Intel or TI for fab service foundry service now of course I mean those big guys the Japanese companies the Intel's and TI's really didn't want them you know and they would make stuff make wafers for for the the little fabulous companies only any very steep price not a financial steeper price but the price of wanting their designs for their own selves for their own product sales but still we were not trusted enough our technology was not just enough that they would come to us and the big companies awfully obvious didn't need us now so it was the solution waiting for a problem to happen now the problem happened pretty quickly in the early nineties and I think that our existence certainly helped to accelerate the formation of a lot of service companies there were maybe 25 fabrice companies in the whole world in 1985 86 and then 10 years later there were 400 500 fabulous companies and some of the big ones were started in their parent in that 10 year period I mean having worked in a fabless companies involved in starting two of them one before TSMC that had to do exactly as you say go form partnerships with the big players who this was not their primary business and then forming one Atheros with the SMC yeah day completely different kind of experience yeah yeah right right so I'll talk about that talk about the impact on Taiwan as well I mean the catapulting of of Taiwan into the semiconductor manufacturing business in a big way I think in many ways we were the first in Taiwan we were not the first semiconductor company in that one how I had other semiconductor companies before TSMC started them but we certainly became the most successful another company in Taiwan after a few years after only a few years and also we I think that we really set a model I hope for Taiwan in hope at governance in innovations now most most almost 95 99 % of Taiwan companies operate with health in gross margin and gross margin 4 or 5% and they don't have money for aandhi they don't even have money for service marketing for for heaven's sake with 4 or 5 percent gross margin them and we I believe we're the first company that showed them that to to be a world-class company to be a real successful company you need to have on the you need to have good sales marketing and and because you needed to have Rd your gross margin would would have to be in the 40 50 percent range right yeah so we I think we set the first example and on corporate governance you know believe that we we set an example also so I think PS MC did begin to apply a different meaning in pawa as a corporation yeah so tell me I think Jensen alluded to this focus and you said it to pure-play this focus on manufacturing excellence Rd and manufacturing designed to bring new semiconductor lines to to production faster how did you get decide to focus on that but how did that become the central focus point for TSMC well because one thing one reason in fact may be the principal reason was that I at the time I started a tsmc I had already worked in the industry semiconductor energy for 30 years right I joined the industry in 1955 and started the tsmc in 1985 and I had already been the head of the largest semiconductor operation business in the world Texas engineers so there was a song dynasty Chinese poem that said that that to be the leader the first thing you have to do is to climb to the top of a high building and look down on all the available roads in the world and I did that actually at TI I a Q PI perhaps the most the height the height of the industry and looked at the the all the available roles and there wasn't really any for a newcomer to compete you know so I to figure out a new road and the new road was this new business model yeah but then of course the problem was that it was a solution looking for a problem but happily the problem occurred you know I think Jason was was one of the problems yeah but I think you understand this point Mars because there were some earlier attempts at silicon foundries but they had mixed business models they were CAD tools combined with companies that had manufacturing lines or they and they never put the focus on manufacturing excellence I think Jensen hit on trust you want you want your customers to trust SMC you know better be manufacturing sauce yeah I that certainly and III mean I owe a lot to a lot of people I a lot to my my own family my own early upbringing which did instilling me values of integrity and being trustworthy and so on I owe a lot to the education I received Stanford and Stanford I although I spent only two and a half years well I should I must mention Harvard and MIT as well all right but but but the the the two and a half years I said I spent a Stanford getting my PhD I think were very important years decisive years for me because I I had started to work already in the seminary before I came to Stanford for my PhD and I I have to say now that before I started working my studying at MIT was really not serious I really didn't know what I wanted in life but then I started working and I knew what I wanted now when I came to Stanford I have been a TI I've been in industry for six years already and I have been a TI for three years and I was on the rise at TI and they sent me to Stanford to get my PhD I already knew what I wanted and I I was a very very diligent and serious and hard-working student the only time I was a hard-working diligent service so I'm sure the students would like to know the secret of finishing a PhD in two and a half years freaking delusion and how tell me how the pieces of your education fit together as you said you were at Harvard first and then you you switch to MIT but yeah and then and then and then went to work before you came here you know how did what happened there why did you switch from Harvard MIT or it's not such a bad place to get a degree no it was in fact even even now I consider that to be my most exciting year it was ours freshmen I just spent a freshman year but remember the time was 1949 to 1950 and there were very very few Chinese there were there was no Chinese American Chinese American politician there was no Chinese American even businessman there were Chinese American laundry people there were Chinese American restaurant people now the only really serious profession was a middle-class profession that a chinese-american could pursue in the early 50s would be technical you know research or or development engineering work yeah so although although Harvard was at first was a very exciting year but the Harvard didn't even have engineering as a special as especially poverty and the undergraduates were general education I didn't think I could find a job a good job anyway if I got a bachelor's degree at Harvard so I switched to MIT the second year and I switched to mechanical engineering yeah and then as I said I I really wasn't all that interested in in mechanical engineering or engineering at all I was a lot more interested in in politics business economics general things you know so that's why I Harvard was far more interesting to me the MIT turn out to be but I actually I went on of course anyway and the in fact I wanted to get a PhD at MIT however I failed the PhD qualifying exam and they they allow you to take it twice you know I think it's the same Ruis Stanford there they allow you to take it twice and if a I've had both times so what was I to do and I decided that I would just go to work and I was kind of sick and tired of mechanical engineering anyway so I I went to work for a new semiconductor company Sylvania and then after three years as Sylvania the new semiconductor division of Sylvania after three years and I remembered one classic address that the general manager of that division gave to all his interact employees and and there were maybe 150 of us well we were gathered in the cafeteria and he said he made one classics comment that I remember to this day he said I'll trouble all trouble as Sylvania is that we cannot make what we can sell and we cannot sell what we can make ever since then I tried to stay away from that a TI later and of course NGS MC and I've I should say I've successfully stay the way yeah let's white guy and tsmc around so tell me about and tell me about the time when you first when you first returned to Taiwan you have those tremors went with Y oh yeah right yes went I did Taiwan was a strange place to me yeah a new place in a strange place when I first went there in 1985 yeah yeah so and that was the first time you had actually been there well I had visited times a button so you returned to head III to head this industrial ride route that you ever Manhattan right yeah I mean about that time and how that influenced your view of the semiconductor industry and what could happen in Taiwan the imagery it's a tea tree history had had a semiconductor pyro line actually semiconductor development project for 10 years ever since 1975 from 19 1975 the the premier of Taiwan the Prime Minister of Taiwan had the foresight to start a semiconductor development project in Taiwan in itchy in this Industrial Technology Research Institute in in Taiwan and it get if God is technology well is sent out invitation for bits for people American companies to transfer technology semiconductor talon ii ii ii ii issue and there were several bidders and the winning bidder was RCA so a tree got its technology early technology CMOS technology from RCA and then from that point on they started to follow to continue to to develop their technology the problem was that it was only a development project so the RCA technology was about one generation old anyway one generation behind when it was transferred to a jury and then when I arrived in 1985 which was ten years after they started they had become two generations behind in spite of their very hard work but the you know they just couldn't keep up with the with the technology problem was that a a that most other semiconductor companies in the u.s. at that time did so we we started tsmc started with with that technology with the III technology which was two generations behind the current technology but we managed to to start to catch up on and I would say the it took us perhaps 10 years the first ten years of tsmc and now of course you know we had we we start to have enough business volume to support a a much higher level of Rd then it recruit young so how do you the thought of starting a semiconductor manufacturing company and the capital that requires seems quite daunting how did you how did you get that company launched well the government first promised to BD to be a 50% the largest investor 50 percent up to 50 percent and so it was my job to get the other 50% of course it turned out that even though the premier promised that the government would invest of 50% in TSMC I still had to get the bureaucracies agreement which was took actually model not just a few months but also a lot of heartache you know a sensation yeah but of course the harder part of course was to get the other 50 percent and and the premier told me that I needed to get the a a technology a multinational technology company to be an anchor investor and then if I if I get this multinational technology company to be the anchor investor then it would be easier he would help me to get the rest from Taiwan business community so I spend about about eight months to get Philips well actually I have written letters letters to a lot of people Intel TI Toshiba Hitachi and you see Sony and actually three companies gave me presentation opportunities Intel did you know I wrote to Gordon Moore and Gordon robach said he said that I I have asked Craig Barrett who was at that time his CTO I think to see me so I taught to create twice two separate occasions but at the end of the second occasion he said no when I interested and TI the same way saw him twice salty I tried I went to Dallas twice long and the same way at the end of the second meeting he said no mark Shepherd said no [Laughter] and then but the only company that appeared to be interest genuinely in stress was Philips interesting yeah and well I had wanted somebody better in technology and Philips in terms of semiconductor technology I had described them as being in the first role of second-raters but I had to said oh I have to settle for them yeah yeah I'm Justin I got them and they invest the 28 percent so I had 48 percent it turned out to be 48 percent from the government Taiwan government 28 percent from Philips and then the remaining 23 24 percent I guess I got from from about 12 or 13 companies and that was very interesting to what what generally happened was that one of the ministers in the government would call a businessman in Taiwan and the podium that he would send me to give a presentation to that businessman to get him to invest so I was on that kind of trip so you know a dozen times and there was one pretty big investor a 5% investor that they actually bought when the Minister of Economic Affairs in tawa first saw him and podium that you want to send me he said okay so I went there actually three times three separate times and in the year and yet he and his staff sat down with me for dinner and none of those people knew anything about semiconductors they will keep quizzing me you know at dinner and I I didn't even I wasn't even able to I didn't even have time to eat anything but and it was you know price this happened two times dinner two times dinner and interrogation and then he called the Minister of Economic Affairs the big the big businessman called the Minister back said no no no I'm not gonna invest well the minister of course was unhappy but he told the premier that the premier said let me call the sky and so the premier told me later that he called the sky and he the premia also told me he said I told him the government has been very good to you in the last 20 years you better do something you better do something what I gonna now look at this you look at what's happened historically it's really fascinating because in the in the late seventies and early eighties I think the there was this thought that Japan would take over the entire semiconductor industry yeah and in fact that hasn't what's it that has not been what's happened in fact there was a surprise of tsmc in Taiwan semiconductor industry then may now mainland China Korea obviously how have you how did this how do you see what what really caused this kind of evolution and these changes well I really think that the problem with a Japan where the Japanese industry was that they never created a fabulous industry it was the fabulous industry in the United States that came up with all the innovations almost all the innovations in the last 20 years so I mean there was this industry Japanese semiconductor industry conference all five or six years ago and I was invited to attend but I was not invited to participate in a panel that they had so the panel the panelists were all the Japanese industrialists semiconductor industrialists sitting up there discussing that they wanted the government to to fund a common fad for them now like PSM see that's what they said you know up on the stage and I was sitting down stage I was very getting very impatient but and then finally finally they stopped talking and the chairman of the of the panel as if if anybody in the audience wanted to make any comment so I raised my hand and they all knew me anyway I said I don't think your problem was was not having a common fat huh your problem was that you just never had a fabulous company it was the fabless companies you know that the the the the big difference that has occurred in the last that remiel was I think something like 2005 between 1985 and 2005 the 20 year time period the Japanese market share had dropped 20% 10 20 points and the American market had gone up 20 points and the fabulous in the meantime or American went from zero to twenty percent right right and that was the difference yeah well not only did but they also don't they also didn't go into the hardcore foundry business the pure-play foundry business which they could have done they had the technology early on they were good at the manufacturing site but they they decided not to do it I guess yeah I wouldn't have welcomed them to right now you to create a fabulous industry yeah that we could then one thing III know that you also have a great love and appreciation of the Arts and and the amenities you mentioned your year at Harvard tell me how that's affected you your leadership your the style with which you've led tsmc oh it certainly has made my life a lot more interesting I I do I am interested in both English and Chinese literature and I'm interested in classical music so my whatever leisure time I have I will read a Chinese literature English in fact the two books that I have were near to my bed may I read them usually you know in the in the hour or two when I was too tired to read anything serious I mean the two books so one is Chinese it's the red chamber stream it is Chinese classic and the other is Shakespeare's plays and and I'm particularly interested in the in the Shakespeare's tragedies and I mean there's a lot of meaning I think a lot of life lives lessons in Shakespeare's play and I'm interesting music I'm interesting history in general in biography and all those I think adequated you to to my life's interest I think and I think that my business experience I think benefits from somebody's lessons that I learned in our reading too I often compare I am a student of the the Second World War the the main battles and so on other often compare the competitive battles that tsmc goes through with the competitors compare them with the the battles in the Second World War starting grad an analyst for the siege of leningrad starting the Stalingrad was was the one I was very interested in because well actually the Midway the the naval namely our battle you know the the Japanese commander couldn't make up his mind whether to keep the the bombers on deck or the fighters on earth and he changed it he change why you know that - yeah he chanted he change it and that that cost him the battle indecision is a very bad thing so final question before we open up the floor uh what advice would you give to the students who are here who seek to have some impact have a life that really achieves achieves great things and many of them will most of them be in some engineering discipline what advice would you give them learn and think both are important both are important boy well here I go to a confusion statement learning and thinking are both important if you just learn and don't think then you quickly become lost if you just think and don't learn then you'll quickly run out of material to think for we have 15 minutes or so for questions and we have mics or what do we have here Jim okay the conditions you described it at the founding of TSMC are very similar to the conditions that exist today in the MEMS industry any other sorry I have a little trouble hearing yeah could you be louder perhaps hello there is okay so I was saying the conditions that existed at the start of tsmc are very similar to the conditions that exist currently in the MEMS industry and I know they what it was in memos so and I know tsmc is doing business and MEMS now it's a very small part of your revenue but I was curious what your vision is for MEMS for tsmc and particularly whether you think tsmc can standardize MEMS the way it did for CMOS technology candid eyes standardized yeah create a standard based technology on which thus that's what we hope to do in fact that's true is in a mark tamarcus yeah one of our co-ceos yeah yes and I I really think that mims is a very major part of what we call general the next big thing you know the current big thing is all these smartphones and tablets the mobile product what is the next big thing well the next big thing I don't know exactly what it is I guess it's it's probably the Internet of Things the wearables and those things but whatever yeah I think I think it's very probably the internal things and wearables anyway MEMS will play a big part in moves so we we really have high hopes for MEMS T SMGs I hope you meant well March you did achieve this in the mobile industry in the beginning there warn't standards particularly for the analog side of it and you needed analog to go into the mobile business and you did become a leader in kind of creating a standardized platform that people could design on and you this because you were willing to collaborate yeah with the early fabulous companies as they came along and that's what we're trying to do in MEMS so when you spun out of it tree do you think that could have been done just as a start or did was it really important to have a government foundation there and it kind of spun out of that and the second question then is is that a useful model to think in in terms of manufacturing generally around the world or especially in the u.s. spinning out manufacturing capability out of our National Labs I really think that the Taiwan the PSM see it Rea Taiwan is a three way in combination I think that was a pretty unique one first of all all right go to Taiwan to a star TSMC at all I went to Taiwan to to be the president of education and I thought I was going to retire in that job you know and the person that recruited me to that job was say did was not the same person that asked me to start tsmc in fact the two of them were not friendly to each other in our Hana and the person that eventually asked me to start tsmc was unhappy because the other guy had recruited me to the issue job and anyway two weeks after I arrived in the Itchy job this other minister who was unhappy because he didn't recruit me asked me to to go to see him and at that time he said you always thought he s MC and well of course he had he didn't really understand semiconductor industry very well so when he said you ought to start a semiconductor company he meant something like the convention or IBM but but I came up with a different with the TSMC business model keep different game plan and he had the confidence in me because because he knew what I had done at TI so so he trusted me so even though he didn't understand what he found he was he trusted me unique situation that motley more generally I find it I think it was a pretty unique situation you you first you you have to start with the insight that the power and government had back ten years earlier in 1975 when they started this to see the group on this development group in history it was pretty big money for them at that time it was you know even just just the rc8 contractor the technology transfer contract was four or five million dollars which was big money for the Taiwan government editor and then sustaining their own debarment activity and that probably cost the a few million dollars a year you know and that was pretty big money for the Taiwan government but they did it and then of course when the time came when I started set up tsmc and the the premier the second minister and the premier said they would support 50 percent they didn't know that it was when we 50 percent of 220 million they thought was a much smaller number than that yeah but they swallow that also so so I'll bet they're happy they swallowed back oh I'm very happy now yes recently some people claim that beyond twenty nine twenty eight nanometers the cost per transistor is not gonna scale they say that 28 nanometer is the last technology note that has in it's going to have basically the lowest cost could you comment on that or do you repeat the question is below 28 nanometers will we get any cost improvements in price of birth transistor some people claim that's the end of the road in terms of price drops per transistor well I think it it does become more difficult but I think it will still happen now now I think there's the controversy going on and whatever but I would say that it will continue to happen will still get lower lower cost transistor maybe not the B creasing cost maybe will not be at the same rate right has it happened before Yeah right right chairman considering your love for literature is there an autobiography in the works is it an autobiography in the works well actually I wrote one in Chinese in Chinese in Taiwan appropriately so it was the envy of the lot of professional writers in Taiwan we sold almost 1000 copies which was a which constituted a burger seller in in power and in fact I had a trend I had translated into English by a couple of professional translators but I didn't like the translation I didn't like the result and Shakespeare wasn't available so I didn't publish it I didn't publish the English version huh yeah I think thank you I think you'll like this one any advice to a startup that specializes in buying and selling primarily secondary semiconductor manufacturing equipment I was starting with a licen ship with the SMC that specializes in buying the selling of used semiconductor yes yes and we just actually start I do think there's a market for that yes in fact you know even even today if we will be interesting buying some used equipment but but whether I I would advise a start-up like that I I don't know I have to think about that yeah but there is a market for it yeah yeah definitely market other questions yes so I have a question reading if you read Macbeth just before you go to sleep doesn't it give you nightmares which is there i I generally even though I'm primarily interested in Shakespeare's tragedies but for bad time reading cards romeo giulia all perhaps the Merchant of Venice yeah I represent the fabless industry we started a company a semiconductor company in Connecticut Niva was trance which we used your foundry and it worked out beautifully it's a wonderful business model to have fabulous in in your capabilities and as you point out is key to the industry itself but I want to thank you and keep up your foundry I also before we finish I also want to say that the Jenson actually referred to by being on honeymoon now when I talk to my visits to him the Year by the way was not 1999 it was 2001 now now but what I want to say is that ever since then you know I think Sophie support has been very very important and when Jenson refers to by last five years - five years being the CEO again of tsmc actually I didn't become CEO again at the age of 75 as you said I became CEO here at the age of 78 anyway last ten or eleven years our actually 13 years I think Sophie's support was most significant I must picking you're right the right life partner is another one [Applause] for you Morris I was a non-technical and non-business question how do you kick your smoking habit I know you used to smoke when you were in graduate school how did I kick it yeah or you have ever kicked it I haven't I really haven't kicked it my my philosophy on smoking is this I smoked a pipe by the way okay yeah and I know that the pipe smoking well possibly I think is better than than cigarette smoking in fact I have read statistics not in the good column horse it's not in a good collar well that's what you say but the statistics I saw say that a pipe smoker actually lives longer a nonsmoker really yeah and the way I see it the way are this is an e-journal for pipe smokers the way I see it is that Wow pipe smoking is injurious to your physical health but maybe it helps your mood yeah and and I I think it the a presence of mood is very important glass of red wine [Laughter] so dr. chant I have a question now everybody knows you know these data integrated circuits process you know the circuit design complex is getting higher and higher so the process is more complicated but at the same time the consumer electronics I are demanding you know faster time-to-market being able to deliver product in a shorter life cycle so in your view how do how do you or you know what we the challenge facing forward and balance out these two different requirements that are coming in India John maybe yeah I think the question revolves around the complexity of circuit design and logic design now with these complex chips has become really significant I mean look at Jensen's products for example and yet there's demand to deliver products in ever shorter periods of time how do you see those two really meshing together and being resolved well I think that the there is a tendency that the Trappist companies are consolidating you know I think there'd be fewer in five years or ten years well I think some of them will be acquired by others so do you think for lady Armand Jasmine will be acquiring people right you'll be alright I mean will a model emerge I mean if you look at how Intel does design they have multiple teams working sort of been up in a leapfrog fashion one after the other because the design takes so long and their apps will see more of that emerge over time I have a question about your decision of going back to Taiwan you are a really very successful person and p.i back in 1985 and what do you see in time one that makes you give you the courage you to go back to Taiwan well I felt that them well actually at TI i did not achieve what I wanted to achieve which was the CEO job he only headed the entire semiconductor unit but it honor so now by 1983 I was actually told very plainly that I would not be the CEO of TI so I left in that year I went to general instrument in New York to become their CEO all with the expectation that I would become the CEO in perhaps three or four years now after year however in general instrument although I still could be CEO in another two or three years but I decided I would not want to be the CEO of general instrument so I was now at a crossroads I was in a company when I really where I really didn't want to to be the CEO no now at that time Taiwan began to beckon so I decided that that would be a good a it was it was a risk but you know I was about I was 54 years old I felt I could still afford to take a risk and I had achieved a measure of financial independence with my Ti and the general instrument stock options all those sort of things there's nothing like what you would consider wealth today you know but financial independence to me meant at that time that I didn't need a job we could I could just live on the interest of my the money I had which which was true you know so no interest rate was actually higher that time - yeah but still still I didn't for financial independence though so I decided to take a risk and that road less taken is what turns you into an engineering hero I think it's really remarkable one more really quick question so I hope it's a good one I hope to segwaying from your point about the CEO so what are the top three things or five things whatever you want to share you feel is would be important for a CEO I mean maybe you know corporate and how study or five things that you think are important for being a great CEO all I of course it depends on what kind of company you are CEO of if if if is you talk about a a reasonably big company let's say ten billion dollars or not kind of company I think a CEOs main job is to bring the outside to the inside of the outside is you know customers shareholders society the world bring the outside to the inside and maximize the inside performance to cope with the outside here I think that's the main job so I'd like to just finish up by telling Morris that those of you who have been outside the back of this room and gone to the right will have seen a wall that has plaques like this honor for each of the engineering heroes and so this is a replica for Morris of the plaque which is now hanging out there on the wall so I'd like to thank Morris and John and Jensen this has been a thoroughly interesting conversation there is a reception outside back for those of you here in the auditorium those of you watching over the Internet will will have to presume that you aren't going to be here but those of you who are here please continue with us outside in the in the reception area and thank you all for coming you you

Channel: Stanford Online

Views: 546,957

Keywords: stanford, stanfordonline, stanford university, hero lecture, morris chang, engineering hero, webinar

Id: wEh3ZgbvBrE

Length: 73min 58sec (4438 seconds)

Published: Fri Apr 25 2014