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TSMC Founder Morris Chang

January 26, 2025

AI Summary

5 min read

The Man Who Saw the Future of Chips

In 1997, a small, nearly bankrupt graphics company called NVIDIA sent a letter to TSMC's San Jose office asking about becoming a customer. They got no response. So the CEO, Jensen Huang, wrote directly to TSMC's founder, Dr. Morris Chang, in Taiwan. Chang was already irritated—he had always told his salespeople never to neglect potential customers, no matter how small. He was flying to California the next week anyway, so he called Jensen back. When Jensen picked up the phone, there was so much background noise that Chang could hear him arguing with his team. As soon as Jensen realized who was calling, he shouted, "Quiet, Morris Chang is calling me."

That moment in 1997 launched one of the most consequential partnerships in the history of technology. NVIDIA was a tiny company with maybe 50 or 60 employees, facing bankruptcy. TSMC had already crossed $1 billion in revenue. Jensen told Chang that the chip he wanted manufactured would not only save NVIDIA but make them a major TSMC customer. Chang was skeptical—to be a major customer, NVIDIA would need to generate at least $50 million in annual revenue. Within two or three years, they did.

The 40 Nanometer Crisis

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What you'll learn

  • 1 (03:23) **Jensen Huang's 1997 Letter** - Morris Chang describes receiving a handwritten letter from Jensen Huang when NVIDIA was a small, struggling company with ~50-60 employees, and how it sparked the TSMC-NVIDIA partnership
  • 2 (09:36) **The 40nm Crisis and 2009 CEO Return** - Morris explains the 40nm yield problems that damaged NVIDIA, the previous CEO's layoff of 700 employees, and why he retook the CEO role
  • 3 (29:13) **Resolving the NVIDIA 40nm Dispute** - Morris describes how he personally calculated a fair settlement (~$100M+), invited Jensen to dinner at his home, and gave a 48-hour ultimatum to accept or go to arbitration
  • 4 (38:01) **The 28nm Bet and the "Sweet Spot"** - After the 40nm crisis, Morris set R&D at 8% of revenue permanently and tripled CapEx to ~$6B, betting the company on 28nm after R&D called it the "sweet spot"
  • 5 (51:40) **Winning Apple: The Dinner with Jeff Williams** - Morris recounts how Apple's COO Jeff Williams arrived at his home via Foxconn's Terry Gou, proposed a 20nm detour, and offered 40% gross margins (TSMC was already at 45%)
  • 6 (96:05) **Intel's Threat and Tim Cook's Assurance** - Jeff Williams paused negotiations for two months after Intel's CEO approached Tim Cook; Tim Cook later told Morris that "Intel just does not know how to be a foundry"
  • 7 (110:00) **The 16nm Shock and Apple's Reassurance** - Morris describes his shock when Apple placed first 16nm orders with Samsung; Jeff Williams flew to Taiwan to promise all 16nm business would come to TSMC when ready

+ Full timestamped outline available in the app

Guests on this episode

Morris Chang Jensen Huang Jeff Williams Tim Cook

Show Notes

We flew to Taiwan to interview TSMC Founder Morris Chang in a rare English interview. In fact, the last long-form video interview we could find was 17 years ago at the Computer History Museum… conducted by the one-and-only Jensen Huang! This episode came about after asking ourselves a version of the Jeff Bezos “regret minimization” question: what conversations would we most regret not having if the chance passed Acquired by? Dr. Chang was number one on our list, and thanks to a little help from Jensen himself, we’re so happy to make it happen.


Dr. Chang shares the stories of a few crucial moments from TSMC’s history which have only been written about in his (currently Chinese-only) memoirs, including how TSMC won Apple’s iPhone and Mac chip business and a 2009 discrepancy with NVIDIA that almost jeopardized their relationship, and the lessons he took from them. We can’t think of a better way to kick off 2025. Please enjoy!


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