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Morris Chang, former chairman and CEO of the world’s largest semiconductor foundry Taiwan Semiconductor Manufacturing Company (TSMC), was originally scheduled to represent Taiwan at the upcoming leaders’ summit of the Asia-Pacific Economic Cooperation (APEC) forum in Chile. However, the summit was abruptly canceled due to social unrest in the Latin American country. Chang predicts: “As the world is no longer peaceful, TSMC is gaining vital importance in geostrategic terms.” Given the volatile international situation and intensifying industry competition, why does the godfather of semiconductor manufacturing insist that “there is always light at the end of the tunnel”?

“It feels like I’ve come home,” Chang told a cheering crowd of more than a thousand employees from the stage at the Hsinchu County Stadium on November 2 as the company held its sports day. A day earlier, he had said that he was pondering what to say to mark the occasion, but knew that he would find the right words once he arrived at the scene. Seeing his colleagues today, he most wanted to express that “it feels like I’ve come home,” but he also exclaimed with emotion: “As the world is no longer peaceful, TSMC is gaining vital importance in geostrategic terms!”

TSMC Chairman Mark Liu, who presided over the boisterous sports day, held once a year, had invited the 88-year-old Chang along with his wife Sophie as special guests. It was the first time that TSMC founder Chang had participated in a company event since he retired from his dual role as chairman and CEO in June of 2018.

As Chang addressed the audience from the stage, he noted that he had promised Chairman Mark Liu last year that he would participate in the sports day event should TSMC continue to be successful. “And I came today,” he said.

After TSMC and American rival Global Foundries resolved mutual patent disputes with a cross-licensing agreement and TSMC revenue hit a record high, the company’s share price recently cleared the NT$300 mark, seemingly echoing the employees’ ambition to “create another miracle.” On October 31, the share reached an intraday high of NT$301.5, pushing the company’s market cap to NT$7.8 trillion, putting TSMC for the first time in the global top 20 companies by market value, ahead of Coca Cola and Walt Disney.

Chang noted that TSMC is looking back on a quite successful year thanks to the efforts of its employees and the leadership of Liu and Chief Executive Officer C.C. Wei. While there were difficult and less-than-satisfying spots, the company had overall fared quite successfully since his retirement one and a half years ago, Chang said. TSMC had demonstrated its competitive edge: technology leadership, manufacturing excellence, and customer trust, which are TSMC’s special skills. “If we lose one of them, then it won’t be the TSMC we want anymore.”

Chang, however, also pointed out, “Aside from the three big factors I mentioned, the world has changed quite dramatically over the past two years! This world is no longer a peaceful one. The APEC summit that was originally to be held in Chile was suddenly cancelled, but this is only one corner in a very tumultuous world. In this chaotic world, TSMC is a very important company. When the world is peaceful, we are an important link in the IT supply chain. But now, TSMC has become a place of vital importance in geostrategic terms.”

Chang believes that against this backdrop, TSMC must not only maintain its three competitive strengths but also safeguard its corporate values: business ethics that make good faith and integrity a priority. “This is how we can best protect ourselves! On top of maintaining our competitive strengths, we must safeguard our values that put good faith and integrity above all. I am convinced that we can continue to prosper in this tumultuous world and that we can continue to serve as a very useful member of society,” Chang said.

The following are excerpts from Chang’s press conference:

Q: You said that TSMC has become vitally important in geostrategic terms. But how can good faith and integrity serve as a protective shield? Could you give us a more concrete explanation?

A: Do you assume there are concrete things that can protect you? There aren’t! There are business ethics that put good faith and integrity above all, but there are also others.

It’s like when people often ask me for my personal opinion. I’ll give you an example: I only support a democratically elected president; this counts among my values, and TSMC does not support any specific person either.

Things get more sensitive the more you keep talking about them. If such things (good faith, integrity) aren’t a protective shield, what else can serve as better protection? Of course, “transparency” is also some kind of good faith and integrity.

Q: You just mentioned that the world is in great turmoil and that TSMC has become strategically important. Shouldn’t corporate leaders make some relevant adjustments in times of battle?

A: Corporate managers must, of course, always adjust, but there is no specific formula for that. Entrepreneurs must keep a clear mind.

I have to say this again: You need a compass, which is a basic set of values and corporate advantage.

In the end, if a company loses its (competitive) advantage, then it won’t become vitally important in geostrategic terms. But if a company wants to keep its advantage, it must have basic values that put good faith and integrity above all. That’s TSMC’s set of values. The ten core values of our company that I wrote up also represent universal mainstream values; nothing has changed here.

How can we face the manifold changes, situations and conditions in the world? This depends entirely on the wisdom of the leaders. That’s what Liu and Wei (must face); it’s their job.

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Q: Did you originally plan to discuss problems related to geopolitical strategy at the APEC summit with the leaders of the United States and China?

A: Taiwan joined APEC under the name “Chinese Taipei”, and (our status) is quite small, quite sensitive. If you know these two points, you will not think that I would talk with the leaders of large powers using a political-strategic approach.

Q: In an interview with CommonWealth Magazine three years ago, you estimated that Moore’s Law (a rule which states that the number of transistors on a microchip doubles every two years while costs decline) will run into a bottle-neck by 2025. The year 2025 is around the corner; will you revise your take on Moore’s Law?

A: The answer is that no one knows! Some twenty, thirty years ago, some people were already predicting that Moore’s Law would die soon, that was back in 1998 and 1999. Moore’s Law was created by Intel (co-founder Gordon Moore). Back then, everyone was most interested in hearing from the Intel president how much longer (Moore’s Law) would be valid. I predicted then that it would remain valid for another 20 years.

The former Intel president (Craig Barrett) predicted (it would hold for) 15 years. That would have been until 2013, but he was wrong. Originally, he was a Stanford University professor; he was a very good technologist who got headhunted by Moore, but he was wrong.

I was wrong too. I said 20 years, which would have been 2018. Now it’s for sure that there will also be 3-nanometer, 2-nanometer (technology).

During the past five years, my answer no longer resembled that of 1998; I did not give a specific date anymore. Instead I said: We don’t know yet. How can you describe such a thing, it means ‘there is always light at the end of the tunnel’.”

Q: How do you view the long-term trend given the advent of 5G?

A: 5G, AI and the Internet of Things...these three things will change the lifestyles of three to four billion people around the globe. Just like 4G, 3G and smartphones changed the lifestyles and careers of at least two to three billion people.

One and a half years ago, I told then-Premier William Lai at a meeting of the Executive Yuan’s Board of Science and Technology that we need to take early precautions to deal with the social problems that 5G and AI will create, such as unemployment, a widening wealth gap, and so on.

Q: Do Liu and Wei ask for your opinion regarding company operations and the direction of society? What kind of questions were asked when you met recently?

A: I still meet with them quite often, but not at fixed dates or regularly. The last time we met was before the investor conference. I watch every investor conference at the office, and Liu will also come to my office to watch with me. We watch to see whether C.C. (Wei) or the CFO say something wrong and drink a cup of coffee and eat a few chocolates after the conference is over. It is very natural, informal and not regular.

What I demand is that I do not want to be told any company secrets because I want to retain my right and freedom to sell TSMC shares whenever I want!

Q: TSMC shares have hit a record high. How do you feel about that?

A: I think it’s great! I am not surprised at all. It might have come as a surprise to the millions of TSMC shareholders that the share price has soared, but not to me. I would have to worry about what to do if the share price didn’t rise against my expectations, right?

I do, of course, understand the general concepts and principles of investment. There is an interlude in my biography, that is the period during which I served as president of General Instrument Corporation. This company is actually an investment firm; I got that two or three months after joining them, but then I had already joined. So I stayed for a while to learn about investment. You know, 35 years ago, the investments of General Instrument...you could say they were a pioneer in mergers and acquisitions, buying a small company, improving it, dressing it up beautifully and then selling it. That was General Instrument’s line of business, and it was a good study opportunity as well. These studies were very useful in the phase before I founded TSMC. When I faced investment banks back then, I was no stranger to the field anymore.

But I personally never thought about investing; my personal investments are very simple. At TI (Texas Instruments, where Chang moved up the career ladder between 1958 and 1983), I held TI shares because I had confidence in the company. I realized my American dream at TI, and it is all owed to my investment in TI.

Supposing you don’t have confidence in a company; would you still invest in it? My thinking is very simple. If you don’t have confidence in a company, don’t invest in it!

My life is divided in two phases. At TI, I was fully committed; that’s why I invested in TI stock. In the second phase, I gave it all for TSMC, so I invested in TSMC shares. If I hadn’t had confidence in TSMC, then the situation would have been completely different.

Q: When you initiated a separation of the chairman and CEO positions (with your retirement), you faced a lot of doubts from within the industry.

A: The dual executive leadership system triggered a lot of discussions in Taiwan, but in Europe and America they have been doing this for more than ten, twenty years. Sun Yat-sen said, “Global progress is like a tidal wave. Those who ride it will prosper, and those who fight against it will perish.”

In 2000, some 80 percent of S&P 500 companies maintained a dual CEO-chairman role with the CEO concurrently serving as chairman, but now only 40 percent allow the CEO and the chairman position to be held by the same person. That’s why I say: This is the big global trend.

Translated by Susanne Ganz

Edited by TC Lin, Sharon Tseng