Stanford Engineering Hero Morris Chang honored for revolutionizing chip making

It is a rare thing when an engineer alters his field so profoundly that he forever transforms how things are done. Doing so twice makes one the stuff of legend. Morris Chang is such an engineer. In the course of a remarkable life that began in war-torn China, Chang has twice transformed the semiconductor industry – and he is still going strong today at age 82.

At a recent celebration at the Huang Engineering Center, luminaries from Stanford and the Global Semiconductor Alliance, which co-hosted the event, feted Chang as a Stanford Engineering Hero. Other engineering heroes include such luminaries as Internet pioneer Vint Cerf, former U.S. Secretary of Defense Bill Perry, Google founders Larry Page and Sergey Brin, GPS creator Brad Parkinson, astronaut Sally Ride and the legendary Stanford Engineering dean Fred Terman.

In 1987, Chang founded the Taiwan Semiconductor Manufacturing Company (TSMC), which was the first chip-fabrication facility, or foundry, to manufacture chips for semiconductor companies that did the design but had no factories of their own. When TSMC began 20 to 30 so-called fabless companies might have existed. Today they are uncountable.

"TSMC has had a tremendous impact, not only on the creation of the fabless semiconductor industry but also on the whole Taiwanese semiconductor industry, and was the spearhead for the growth of the industry,” said Stanford University President John Hennessy, whose discussion with Chang was the centerpiece of the event.

“Before TSMC, companies that designed silicon chips had their own fabrication facilities, expensive factories so they could design and make chips. TSMC's foundry model resulted in much lower costs for many companies, and also in a wave of creativity and innovation,” Jim Plummer, dean of the School of Engineering, said in his opening remarks before an overflow crowd.

Morris Chang talks about how creating the foundry industry spawned hundreds of fabless semiconductor companies. (Video: Stanford Video)

Jen-Hsun Huang, MS ’92 EE, founder of the graphics processor maker NVIDIA, one of the leading fabless semiconductor companies and an early customer of TSMC, delivered a special homage at the start of the event.

“The world is full of successful people, but heroes are rare,” Huang said. “There is a difference between success and impact. I think Morris – his career, his philosophies, TSMC, its strategy, its core values – is absolutely a study in industrial revolution.”

Self-effacing hero

Chang was characteristically humble.

“I came up with the foundry business model. It sounds good, particularly today, when everybody thinks that it was a very clever idea. But at the time it was really a solution looking for a problem because nobody wanted just the ‘maker’ function,” Chang recalled.

TSMC ushered in the so-called fabless revolution, allowing companies to specialize in chip design and outsource the fabrication.

Founding TSMC was actually Chang’s second major career accomplishment. The first came while he was at Texas Instruments, where he started working 1958 and which sent him to Stanford for his PhD. Over time Chang ascended through the ranks to become group vice president of Texas Instruments’ global semiconductor business.

While in the that role, he initiated the strategy of pricing chips aggressively, sacrificing profits early on to squeeze out competitors, earn market share and, only then, increase prices to reap profits as the dominant provider. Controversial at the time, the strategy is now standard across the industry. Chang helped make Texas Instruments the largest and most profitable chipmaker of that era. After Texas Instruments, Change spent a brief time as president and chief operating Officer at General Instruments before founding TSMC.

Tumultuous early life

Born in 1931 to a middle-class family, Chang grew up amid upheaval in war-ravaged China. Chang’s family was forced to flee advancing armies during three different wars – the Sino-Japanese War, World War II and the civil war that followed.

“I turned 10 in 1941. The most earth-shaking event that occurred that year, of course, was the Japanese attack on Pearl Harbor,” Chang recalled. “But a lot of people don't know that just a few hours after the Japanese attacked Pearl Harbor, they attacked Hong Kong, where I was living with my parents. I don’t recall much before then, but memory of my life since that point has been very clear, very vivid.”

Morris Chang talks about his youthful experiences in China before, during and after World War II. (Video: Stanford Video)

When the Chinese civil war began in 1948, Chang’s family was again turned upside down and forced to leave China. The next year, Chang came to the United States to enter the Harvard University freshman class. He dreamt of becoming a writer but transferred to the Massachusetts Institute of Technology when he saw that specialized technical training would improve his job prospects.

After earning his master’s degree in 1953, Chang joined Sylvania. Three years later, he made the move to Texas Instruments and settled in the then-nascent semiconductor industry, where he wrote the first significant chapter of his legacy.

In the early 1960’s, Texas Instruments sent the promising Chang to Stanford to earn his PhD in electrical engineering. When he returned, he rose quickly to manage what was then the world’s largest semiconductor business. Looking back, Chang credits his education for much of his success, but he notes that times have changed.

“In my youth if we had a good education, such as an education at Stanford, if we were willing to work hard, I think that we could expect a good future, a good job and stability. Nowadays, I think the competition is much tougher,” Chang said, noting that today the object is less a pure accumulation of knowledge and more developing the qualities of entrepreneurship and innovation.

“There is an old Confucian adage that says you have to learn and think at the same time. If you just learn and don't think, you're still lost,” he counseled.

Morris Chang advises today’s students that they will have to acquire not merely knowledge but also understanding to achieve the entrepreneurial mindset required to succeed. (Video: Stanford Video)

As much as Chang is lauded for his business prescience, he is equally admired for his leadership philosophy and integrity in personal and business dealings. In the earliest days of TSMC, Chang established a set of core values that have remained its moral compass ever since: integrity, innovation, and commitment to customers and employees.

In the chip-making industry, there has been no other company quite like TSMC and no leader quite like Chang, said Huang, whose own success at NVIDIA was enabled by the foundry model.

“Pretty much everyone has a TSMC-made product in their pockets right now; they just might not know it,” Huang said. “There are very few companies that I know that have had as a great an impact on society as TSMC.”

Andrew Myers writes for the School of Engineering.