Founded with a starting capital of 200 million dollars, Taiwan Semiconductor Manufacturing Company (TSMC) has now become a semiconductor giant with a net profit of over 34 billion dollars and a market value of more than 700 billion dollars, occupying 60% of the global chip foundry market.
Tech giants such as Apple, Intel, AMD, Qualcomm, Broadcom, and Nvidia rely on TSMC’s technology and production capacity to gain a competitive edge. As the race for dominance in the semiconductor chip industry becomes increasingly crucial, major economies such as Europe, the US, and Japan are eager to court TSMC. Consequently, TSMC has become the most influential company in the global chip industry game.
The man behind the creation of TSMC is none other than Morris Chang.
Before founding TSMC, Morris Chang had already achieved a series of remarkable business successes. He led Texas Instruments to defeat Intel and become the industry leader, pioneered the semiconductor foundry manufacturing industry, ended IBM’s dominance in foundry technology, joined forces with ASML to defeat photolithography machine leaders Canon and Nikon, and thwarted Samsung’s plan to dominate the chip industry. American media called him a person who makes opponents tremble.
Apart from his professional achievements, Morris Chang’s life is also exceptional. In his youth, he attended Harvard, MIT, and Stanford, the three most prestigious universities in the United States. At the age of 41, he became the highest-ranking Chinese executive in top US companies. At the age of 56, he founded TSMC, which has become a leader in the semiconductor industry. Even at the age of 92, he still wields great influence in the global chip industry battle.
What is Morris Chang’s secret to success? In his view, lifelong learning, independent thinking, grasping direction, flexible management, and upright business conduct are all critical factors. This article summarizes 66 of Morris Chang’s business thoughts to help readers explore the secrets behind his exceptional life and career.
The two most important things in life are lifelong learning and independent thinking
- 1. Running a business is equivalent to continuous learning. Technology enterprise operators who do not understand technology are not qualified, but what should they do if they are not experts in the field? They need to have sufficient knowledge before they can have the ability to make judgments.
- 2. Lifelong learning consists of two parts: reading and listening.
- 3. Lifelong learning is not about “learning as long as you live”, but about “planned, systematic, and disciplined” reading.
- 4. Planning is necessary to develop a reading and learning plan, which should start with at least a six-month or one-year plan. When I studied mechanical engineering at MIT, I didn’t even know what a transistor was. After entering the semiconductor industry, the first plan I made was to study books related to semiconductors, and I have been following this plan for the rest of my life because I have been working in the semiconductor industry ever since.
- 5. Having a system means having a comprehensive learning system. As a manager, one needs to possess a complete set of knowledge, such as understanding financial statements, the stock market, and other related areas. Even if these areas are already familiar, one should continue to expand their horizon, such as being aware of the international situation and macroeconomics. Some CEOs of world-class companies are not only CEOs, but also world-class individuals, who not only care about the company’s business but also understand the world economy, geopolitics, and other areas that world-class CEOs should know.
- 6. Having discipline means setting aside a specific amount of time each day for reading. My advice is not to spend too much time on social activities but instead to save time for reading and reflection.
- 7. The other half of lifelong learning is “listening.” Reading is learning from books, while listening is learning from others. One can learn a lot from chatting with friends, attending meetings, and doing other activities. Moreover, listening often enhances the benefits of reading. The saying “a single conversation across the table with a wise person is worth a month’s study of books” is true.
- 8. Everyone needs to “listen,” but “listening” is also an “often-neglected art.” Most people are not good listeners. If a person frequently interrupts you, you know they probably aren’t good listeners and lack patience. Such individuals often assume that they already know what you are going to say, especially if they find you to be a slow speaker like myself. Smart people often interrupt me, completing my sentences for me. However, they are often 90% wrong in guessing what I wanted to say. As a result, they miss the opportunity to learn. Of course, I correct them, but not every time.
- 9. Listeners are more tired than speakers. The speaker knows exactly what they are talking about, while the listener not only has to “listen” but also has to “think.” In addition to combining what the other person says with the presented data, the listener must also pay attention to the speaker’s body language. If one truly listens to others, one will be more tired than the speaker.
- 10. Another reason people cannot listen is that they cannot accept different opinions. As soon as someone has a slightly different opinion or offers criticism, their attitude immediately becomes defensive, and they seek to argue. This means they miss out on the opportunity to learn.
- 11. Another critical aspect of life is independent thinking. Independent thinking ability is even more lacking than the habit of lifelong learning. Both habits should be developed from a young age. Regardless of what others tell you or what you read, do not believe it right away. You need to think about it. What evidence does the speaker provide? Is the evidence biased? They may give a few good examples, but are there others they are ignoring? Even if they give good examples, are those examples leading to their conclusion?
- 12. How can one develop independent thinking skills? One is an attitude issue, having a critical thinking attitude. The second is a perspective issue. Independent thinking also depends on how much data you have. If you have only seen a limited amount of information, your ability to think independently will also be limited. The more you listen and see, the stronger your ability to think independently. When it comes to any matter, you will hear different opinions from two or three sides, which provides more material for independent thinking.
- 13. My process of thinking is observing, reading, learning, and thinking. Observing work takes up about two-thirds of the process while observing outside of work takes up one-third. The key is to observe more and accumulate more knowledge.
Leaders need to know which way to go
- 1. The CEO of a technology company must have a technical background and continue to keep up with technological advancements throughout their career, as technology is constantly evolving. The former CEOs of Intel were not technical personnel, which could have hindered their company’s success.
- 2. A leader must possess two qualities: the ability to attract followers and a clear vision of the direction to pursue. These are not just the defining characteristics of a good leader, but essential skills for any leader.
- 3. Authoritarian leadership and strong leadership are fundamentally different. Authoritarian leadership is entirely reliant on authority, similar to a dictatorship, where decisions are made from the top and followed without question. In contrast, the defining traits of a strong leader include having a strong opinion on important decisions, frequently seeking the opinions of others, being flexible about decisions outside of direction and strategy, and not spending an excessive amount of time trying to convince every person.
- 4. A leader’s values must include the concept of “larger than oneself,” as otherwise, no one would be willing to follow them. Even if people initially follow a leader, they will leave once they realize the leader is only concerned about their own interests.
- 5. Enthusiasm is also a crucial value that a leader must possess. It is rare to find a leader who is apathetic or lacks enthusiasm. If such a leader exists, they are unlikely to have many followers.
- 6. Inclusivity is also essential. Wherever I go, I rarely bring my own people because these so-called “entourage” will eventually form cliques. It is important not to limit ourselves to small circles.
- 7. Honesty in dealing with employees is crucial. Honesty is different from being straightforward. Good leaders praise employees when they perform well and offer constructive criticism when they do not. Hiding dissatisfaction from subordinates is not honesty. Honesty can elevate leaders to a different level of corporate leadership because it can touch people’s hearts and inspire employees to follow.
- 8. It is possible to be strict with colleagues, but it must be done fairly, with clear rewards and punishments.
Management is a living science
- 1. Business management is a “living art” that is unlike physics or engineering where you can solve problems by mastering the theories. There is no complete set of knowledge to teach you how to apply management techniques because the landscape is constantly changing. Management is not a one-size-fits-all approach that can be applied universally in every company.
- 2. The management guru Peter Drucker once said that involving everyone in the decision-making process used to be considered a good practice, but if a ship is about to sink, should the captain still seek solutions through meetings? The captain is better off issuing direct orders and responding accordingly.
- 3. Someone asked me whether decision-making is based primarily on intuition or on analyzing financial data. Based on my personal experience, a good manager’s decisions are mostly based on intuition, but objective data is needed to help confirm whether to act or not.
- 4. Senior executives often experience burnout due to psychological pressure from intuition being insufficient, and data not being enough. They lack a sense of security. However, intuition is not innate and requires long-term observation, reading, learning, and thinking abilities to accumulate. If these abilities are accumulated, there will be less psychological pressure when making decisions based on intuition.
- 5. It is best for a CEO to not micromanage and instead focus most of their time on thinking about the future. If every little thing needs to be reported to the CEO for a solution, it will only lead to unnecessary distractions.
- 6. Inevitably, traditional business organizations tend to adopt a hierarchical structure. However, the drawback of this model is that information must pass through several levels before it reaches the top, by which point it may be too late and the message may be filtered down to just a tenth of its original content. I do not advocate for a pyramid-shaped organization, but rather, I support a fluid-form organization.
- 7. A fluid-form organization allows individuals within the same level of hierarchy to manage each other. This interactive management style establishes an open and constructive conflict environment where many issues can be resolved between peers.
- 8. Another characteristic of a fluid-form organization is that accountability is crucial. Although each individual within the organization is responsible for managing others, and positions can be interchangeable, the most important aspect of organizational ethics is accountability. A supervisor can seek advice from friends or colleagues at any level during the decision-making process, but once the decision is made, the supervisor is solely responsible.
- 9. The best way to train employees is to provide them with tasks and responsibilities. Ideally, a supervisor would manage around seven to eight employees, akin to a lifeguard sitting in a wide boat.
- 10. While empowerment is often discussed, assigning responsibility should be given greater consideration. If someone who is empowered does not realize that they have also been assigned responsibility, they should not be empowered in the first place. Empowerment is like creating one’s own gravity; a person who has been promoted and empowered does not immediately gain power but must earn respect from those below them in order to attain it.
- 11. In the process of power and responsibility, responsibility comes before power. Young and talented people who take responsibility will gradually attain power. Those who insist on having power before responsibility or both at the same time often end up with neither.
- 12. Both China and the West emphasize the need for rewards and punishments to be proportional, with the Chinese often saying that rewards and punishments should be clearly distinguished. However, in the business world, the proportion of rewards to punishments is actually very high, with few people being punished, while those who receive rewards are as numerous as carp in the Yangtze River.
- 13. A company must change its culture of “unwillingness to review others,” and only companies that are able to review others can make progress.
- 14. When implementing performance evaluations, few supervisors are willing to candidly inform their subordinates of their weaknesses. In fact, how communicating an employee’s weaknesses is also a form of training for the supervisor, especially for subordinates who have been selected as potential successors. The supervisor must be sincere and provide constructive feedback to the subordinates.
- 15. Performance evaluations are a system that aims to motivate and shape behavior, but there are few successful examples because the focus is often placed on the evaluation itself, neglecting the “shaping” aspect. The key to a successful performance evaluation system is “cultivating and shaping” rather than just looking at past performance.
- 16. The byproduct of a performance evaluation system is the process of identifying the top 10% or 5% of performers and the lowest performers, which can achieve both motivational and communication effects.
- 17. When promoting employees, it is not enough to only consider their past work records, but also whether they identify with the company’s business philosophy.
- 18. Psychologists generally divide incentives into two categories: “maintenance factors,” including basic living expenses, which can motivate a person to work but cannot fully engage them. Maintenance factors also include a comfortable working environment, company-provided dining, housing, etc. The other category is “motivating factors,” which include a sense of achievement, the potential for additional income beyond the base salary, team enjoyment, and recognition.
- 19. Psychologists believe that cultivating a person’s ambition and satisfaction with achievements is important. If you want to find a group of people to work with, you should look for those with the potential for a sense of achievement. If you are looking for a group of people whose primary motivation is to make money, my experience is that while making money is certainly one motivating factor, it is not as strong as the sense of achievement, and is not a long-term solution, as people who earn money may lose their motivation and leave.
Big strategy to see the market, a small strategy to see the opponent
- 1. As a business leader, I place a greater emphasis on business models and strategies, with particular emphasis on the higher-level business model. This is the most important innovation of TSMC (the principle of focusing solely on contract manufacturing and avoiding perpetual competition with customers).
- 2. The business model has defined by “who the customer is” rather than by “what the product is.” Starbucks can sell a coffee that costs 40 cents for $2.50 because they have positioned their customers as people who enjoy the finer things in life, rather than just those who need a quick pick-me-up. I greatly admire Starbucks for this.
- 3. A company’s strategy can be divided into two main parts: the big strategy and the small strategy. The big strategy looks at trends and searches for a large “blue ocean” beyond the big “red ocean.” The small strategy looks at customers and competitors, finding ways to meet customer needs and exploit competitors’ weaknesses. Both big and small strategies require a leader’s vision, which comes from constantly thinking and planning for the future.
- 4. A successful strategic plan is 10% inspiration, or the formation of the strategy, followed by strategic planning to determine how to implement the plan, assess the resources and core competencies that can be leveraged, and finally the execution process.
- 5. TSMC measures the scale of its strategy by meeting customer needs, which include: identifying customer needs, providing technologies that enable customers to succeed in competition, or at least compete with their competitors; flexibility in responding to customer needs; low prices; short cycles; quality and reliability; design services; seamless communication; turnkey services; protecting customer proprietary information; immediate efforts to solve any problems that may arise; and TSMC’s cooperative attitude and behavior.
- 6. Technological leadership, superior manufacturing, and customer trust are TSMC’s three major competitive advantages and core competencies. If any one of these is lost, TSMC will not be the company we desire.
- 7. TSMC aims to become a company centered on marketing and service. Every employee is a salesperson for the company. While they are certain professionals, such as engineers, accountants, and managers, they are also salespeople. Senior management must not only be excellent salespeople and professionals but also excellent business people. If they are not, they should train themselves or be trained.
- 8. Everything that cannot be quantified is unmanageable. Quantifying management indicators is the foundation of a company’s fundamentals.
- 9. Corporate culture should be treated as a model for company behavior, not something that simply forms naturally as a company grows. It should be formulated by the founder or CEO and used as a proactive guideline, which is also the responsibility of the leader.
- 10. Members of a company should share the same vision and adhere to the same corporate culture. If their paths diverge, they cannot work together.
- 11. Running a business requires a spirit of long-term cultivation, but many businesses in Taiwan lack this spirit, as do their shareholders.
- 12. In order for a company to go global, it must also have a moral sense of upright management.
- 13. TSMC has four core values: honesty and integrity, commitment, innovation, and customer trust.
- 14. Honesty and integrity represent the character of the company and are the most basic and important values. As for the rules of conducting business, the first is, to tell the truth, the second is not to exaggerate or show off, and the third is not to make promises lightly, but once a promise is made, to go all out within a reasonable scope and to respect the intellectual property rights of peers in fair competition. Corruption, cliques, and corporate politics are not allowed. The primary criteria for hiring are character and ability, not relationships.
- 15. Commitment is a two-way street. The company must make commitments to its employees, and employees must make commitments to the company because, without commitment, there is no faith. A person without faith or soul cannot be a happy person. If one does not make a commitment to oneself, then one is giving up on oneself.
- 16. Innovation is a common trait among all world-class enterprises, and innovation does not just refer to technology, but to innovation in all aspects. In the digital economy era, in order to establish a successful business model, organizations must continue to innovate.
- 17. Customer trust is at the core of TSMC’s business model. We are always concerned about competitors grabbing business, but we are also willing to say that in our competition with Samsung and Intel, we will win customer trust.
I don’t aim for glory in life
- 1. My life goal is not based on whether it is brilliant or not, but on being healthy and happy.
- Taiwanese people often say “you have to work hard to win”, and “working hard” seems to imply working overtime. However, I completely disagree with this notion. I firmly believe that work should not be measured solely by quantity and that a fulfilling life is not solely dependent on work.
- Life is more than just work. It also includes family, spouses, children, friends, and hobbies. Without a fulfilling life outside of work, there is little joy in life.
- The sole purpose of work is to efficiently accomplish the right tasks.
- I have been working since the age of 24 in 1955, for a total of 55 years, which translates to roughly 3,000 weeks. Whether as a grassroots engineer, general manager, or chairman of the board, I have never worked more than 50 hours per week. I also make it a point not to call my colleagues after work.
- When I started paying attention to working hours, I noticed that the company was showing movies in the factory halls after work for employees to enjoy. I put an end to this practice because I believe that work and life should be separate. Why should employees stay at the company after work and see the same faces? The company should provide a fun work environment, while the employees are responsible for their own lives outside of work. This is my philosophy. Only by giving employees the autonomy to balance work and life will they actively seek that balance.
- Just because someone else has more money or more success than you does not mean they are more capable or wiser than you. The problem may simply be that you have not seized the opportunities and time to achieve your own goals. Comparing yourself to others is not necessary; it is important to have an open mind.
- Since I was 20 years old, I have developed a lifelong habit of maintaining a healthy lifestyle, including regular sleep patterns, avoiding overtime and socializing, eating light, exercising regularly, reading and learning, and listening to music.
- Life and career are like a marathon, where success is often the result of a long-term effort, rather than something that can be achieved in one or two years.