The lesson from Shang-Yi Chiang (2)

Colley Hwang, DIGITIMES Asia, Taipei 0

Shang-Yi Chang (left) while still at TSMC. Credit: DIGITIMES

Intel has been keen on pursuing the most advanced technology, but has not been as quick to make decisions as TSMC when it comes to responding flexibly to market needs. Intel could sell processed wafers at very high prices, but TSMC must use competitive pricing to attract widespread adoption by customers. And there's also consideration about yield rates.

The market trend is slowly moving against Intel. On the one hand, the PC market is becoming saturated and Intel's main competitors are leveraging TSMC's manufacturing capability and competitiveness to expand presence in the end market at the cost of Intel. Nvidia has been a major customer of TSMC for a long time, and AMD has embraced fabless operations since Lisa Su became CEO. They are both leveraging TSMC's advantages in the market.

But it was the making of Apple's A9 processors that really served as a critical moment in TSMC's rise to dominance in 2015, when it beat Samsung Electronics to become Apple's exclusive supplier of A-series processors. We originally expected TSMC to overtake Intel in terms of revenue and gross profit by mid-2023, but TSMC managed to do that in second-quarter 2022, with its gross profit of 59% far exceeding Intel's. And even AMD's market capitalization has exceeded Intel's - a development closely related to TSMC's "structural advantage".

When interviewing Shang-Yi Chiang, the media usually would not fail to mention his comments on TSMC founder Morris Chang. Chiang has said that Chang had more responsibilities than himself at TSMC, but would always manage to get off work on time, while Chiang would have to stay till 9 in the evening. I have written an article about Morris Chang, stressing that he only took care of important things, not trivial matters. But as for what's important and what's trivial, Chang of course had the final say.

Chang has often emphasized in his public speeches that it is the founder or CEO who decides the business model of the company and construct the corporate culture. This is why Chang, who is now 91 years of age, was still able to represent Taiwan in an APEC meeting in 2021 - something unprecendted in the history of Taiwan. Chang takes credit for creating Taiwan and TSMC's special status in the global semiconductor industry.

In his recent interview by the California-based Computer History Museum, Shang-Yi Chiang asserted that joining China's SMIC was the stupidest thing he had ever done.

We often have unrealistic expectations of certain things. Chiang had two stints at SMIC, and how come he made the same mistake twice? And he even served as CEO at China's Wuhan Hongxin Semiconductor (HSMC) between his two SMIC stints. He claimed that he did not have trust from "higher-ups" because of his US and Taiwanese citizenships. Who exactly are those "higher-ups"? Is this a common experience of Taiwanese in China, or is it a unique experience of Shang-Yi Chiang?

I think we all have our own assessments, but what is the reason behind the "chip wizard" SMIC co-CEO Mong-Song Liang's determination? Liang once left a message on my Facebook page, and I'm curious to know what he has been thinking over the years while working at Samsung and SMIC. Everyone's life is unique, so if you make a choice, face it!

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.