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Morris Chang: the 'King' of Taiwanese Chipmakers
DeepDarkSky writes "This is a general interest story in the NY Times about Morris Chang - the founder and chairman of Taiwan Semiconductor - and the dynamics of semiconductor manufacturing in Taiwan, and how the earthquakes a while back affected it. Since Taiwan is the leading manufacturer of chips, with Intel, Motorola, and IBM (also Transmeta, as I vaguely recall in the press releases) all having chips manufactured in Taiwan, I thought this would be an interesting read.
More significantly, also in the NY Times, another story about the U.S. House of Representatives voting to strengthen military ties with Taiwan. Perhaps they are all too aware of the U.S.'s (and the world's) dependence on Taiwan's chip manufacturing prowess (reminded by the earthquakes) and are eager to protect this source against China?" (free NYT reg. req.)
Judging from some of the postings on this subject, I think you don't understand why Taiwan has become a huge manufacturer of computer parts.
Remember the old days when "Made in Taiwan" was considered cheap and poor quality? Well, because the government in Taiwan wanted to get away from that image, they heavily invested in the one industry that will bring them into the 21st Century: electronics.
The result is obvious--if you open up a desktop computer, look at how much of the computer is made in Taiwan. I'll almost say that the motherboard, the majority of the surface-mounted chips on the motherboard and peripheral cards, the memory modules, the CD-ROM/DVD-ROM drive, the CPU heatsink/fan and the system case are made in Taiwan. Only the hard disk drive and CPU are not likely to be made in Taiwan. Think about it: if your x86-based computer is using an Abit, FIC, Gigabyte, Supermicro or Tyan motherboard, they are all made in Taiwan.
This is a tribute to the of the people of Taiwan, whose hard work has turned Taiwan into the one of the most influential countries in the computer industry.
By the way, the People's Republic of China are no slouches in the computer industry, either. They have a very popular (and well-made) brand of computers named Legend that runs the Chinese versions of Windows 95/98 and Linux.
Don't forget that one of the most popular commercial distributions of Linux--TurboLinux (formerly Pacific Hi-Tech)--originated in Taiwan.
In short, stop sounding like those protesters at the WTO Summit last year. The xenophobia doesn't work in a world where trade is a fact of life.
Raymond in Mountain View, CA
Very true.
Pride is dangerous. It makes people do stupid, irrational things. Like the idiots who engage in retribution driving after being cut off in traffic -- they don't accomplish anything for themselves and the endanger everyone around them.
Should you live your life tiptoeing around other people's personal pride, or run your foreign policy around other people's national pride? Well, in principle you shouldn't have to, but only a fool would not take the possibilities into account. Remember WW I. China might very well decide to kill the goose the laid the golden egg, and possibly drag the entire world into war, and their leaders would even strengthen their political position as they lead their country into hell -- at least until they exceeded the people's endurance. And the Chinese people have tremendous endurance.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
I would agree with you. Many Americans I know are ashamed about a many great things regarding our country. Our leaders have no moral or ethical constraints, we go around blowing the shit out small defenseless countries (Bosnia) and give crap to others who try to do the same thing (Chechnya/Tibet/etc).
As far as the trade/imperialist idea of shoving bad things down other countries throats (such as cigarattes) the American people also suffer from it. Advertising cannot be escaped, phone, snail mail, email, radio, TV, its everywhere, and it invades our senses like a something rotten...
We are talking about 3 seperate things:
1. American Government (yuck)
2. Massive INTERNATIONAL corporations (double yuck) ( I happen to work for ING, a Dutch financial group of companies which has more money than most countries)
3. American People (most of whom are decent and just want to be left alone).
3a. I would also add that most People anywhere are decent and just want to be left alone.
Im sure you heard about the demonstrations at Seattle re WTO. We dont like it either.
You mentioned giving food to starving Africans, but only if they quit having kids. Whats wrong with that? Am I responsible for the poor resource management of someone in some other country? If some people or country cant feed their people, am OBLIGATED to help? No I sure as hell am not. I WILL help, because I WANT TO, but I dont want to have to help twice as many people the next time.
You dont like handouts with conditions? Then dont ask for em.
This brings up another subject which chaps my ass.
The current peace process going on re Isreal.
Isreal seems to think the US should give them about $16Billion dollars in military (including Stealth Technology) and financial aid, or they won't accept the peace process.
Jews and Arabs have been fighting since the time of Abraham, and they are going to keep fighting until the end of time. Why the hell should I(yes me, my taxes) cough up cash so two little spoiled brats will stop fighting and play nice?
Piss on them! Let em blow each other hell if they want, I am tired of working my ass off so the rest of the world can get free rides.
By the way, my "fat grease burger white ass" as so you eloquently put it happens to provide financial aid to 6 people...mostly children in developing nations. They get an education, decent food and a sense that someone cares. Again, because I want too, not because I am obligated to.
Besides, where do you come from? Nothing bad ever happens where you are? Your government has never done anything bad to anyone? No attrocites? No genocide? No forced relocations?
Anonymous Coward indeed.
-- A Human Being is nothing more than mobile CO2 factory. Bow to the plants.
Give me a break. The Mig-21 design originated in the late 1950s-early 1960s; has been used in Vietnam and Middle East wars, and has been beaten badly in all cases. A Mig-21 is in no way comparable to an F-16A/B, let alone later F-16C/D's.
Shenyang F-7 is a different beast than the Mig-21 though, and later models have improved different wing structures, powerplant and avionics; but they are still no match for F-16s since they don't have BVR(beyond visual range) missile capabilities; like the F-16s have recently gained with AIM-120 AMRAAM.
I think it just suffices to say the Mig-21 was replaced in early 1970s with the Mig-23 in Soviet service; which in turn was replaced by the Mig-29 in early 1980s. Which means the Mig-21 is now two generations back.
Still, the Chinese can produce weaponry at incredibly cheap costs; and they have millions of people who they will easily sacrifice for the People's good. The Germans definitely had the technological edge in WWII in the Russian front, but ultimately Russian "human-wave" tactics got them. Nobody knows if a modern fleet of F-16s have any chance against, say, 2,500 ancient Migs.
--
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...and thank god they did, or a large portion of China's history might have been lost. You forget that not long after the revolution, the Red Guard took it upon itself to discredit and destroy anything related to the old order -- including places, people, and said historical relics.
BTW, Most important among these historical relics are China's imperial treasures. It was the Nationalists who packed up these treasures during WWII to protect them from the Japanese, and again after the civil war to protect them from the Communists. The imperial treasures are important not only as priceless examples of art and history, but as symbols of Imperial rule that at one time lent legitimacy to whoever posessed them.
In 1996 they were shown in the US, where they were exhibited in a tour titled, "The Splendours of Imperial China". The collection visited the Metropolitan Museum of Art in NYC, the Art Institute of Chicago, the Asian Art Museum in San Francisco and the National Gallery of Art in Washington, DC.
I take the politically incorrect view that Taiwan and China are two seperate countries. Taiwan has never been ruled by China's communist government, nor China by Taiwan's current administration (who are very different, thankfully, to the Kuomintang who originally set up shop there). Therefore the rest is merely hot air. There is no state of war between China and Taiwan, despite much rattling of sabres, nor any justification for a war beginning - it would cost China a lot more, not only in terms of its international standing, than it would be worth to invade. Thankfully. Therefore China's objections to the arms imports are meaningless, because they do not practically disadvantage China as a nation in any way whatsoever. And if China wants to join the WTO, it had better not object too strenuously to what is in effect an exercise in free trade.
"What is freedom of expression? Without the freedom to offend, it ceases to exist." Salman Rushdie
The House vote just reiterated long-standing US policy that discourages China from invading Taiwan. This commitment has ideological, not economic roots. It has more to do with halting what once feared to be a militaristic expansion of Mao's Revolution off the continent. The vote has much more to do with continued Chinese military exercises, saber-rattling, and trash-talking directly across the sea from Taiwan.
When I'm singing a ballad and a pair of underwear lands on my head, I hate that. It really kills the mood.
-Tom Jones
Asimov really had it all down, didn't he. Protecting yourself against your big neighbors by making them dependant on your technological exports is straight out The Foundation's traders period.
OK, it's not all that novel an idea, but it struck me in this context for some reason.
-
We cannot reason ourselves out of our basic irrationality. All we can do is learn the art of being irrational in a reasonable way.
TSMC makes *all* the graphics chips for 3dfx and Nvidia. This company controls key component manufacturing for the whole PC industry.
Kindness is the language which the deaf can hear and the blind can see. - Mark Twain
Everything that led up to the situation between Taiwan and China is you described, more or less. But making decisions today based on how Taiwan was formed decades ago and ignoring what it is today is foolish. Granted, China is much more powerful today and is a force to be reckoned with. But just as the US had indirectly skirmished with the Soviet Union during the cold war era with countries like Afghanistan and the sort, the US will do the same with China vis-a-vis Taiwan. More importantly, Taiwan is an economic asset to the US and the world. China owes its current economic growth to Taiwan and Hong Kong. If we keep thinking of the country today in terms of the way it was formed, we would not be dealing with Germany, Italy, Japan or many of the other countries that we deal with today.
Its exactly this kind of crony capitalism that led to the crash of the Tiger Economies. In the UK we dropped the "national champion" approach to industrial policy when Mrs Thatcher became Prime Minister in 1979, and we are much better off as a result.
The problem with national champions is that they know they are too politically important to be allowed to fail. As a result they don't worry about running up losses because they know the government will bail them out. Sure, they can sometimes be success stories, but frequently they become economic millstones. UK readers who are old enough may remember the old British Leyland car makers. They were the national champions of UK industry during the 60s and 70s. It didn't take the unions there long to cotton on: the government wouldn't close them down or insist on layoffs because of the bad publicity, and hence they could strike for higher pay, shorter hours, or whatever else they wanted with complete disregard for anything else. BL became a byword for industrial strife, and the cars they made were famously bad.
Incidentally, while BL was destroyed by its unions, they are not the only thing that destroys national champions. The management can do just the same. Their primary cash flow comes from the government rather than their customers, and the government will still be there even if the customers go away. Hence their primary goal becomes pleasing the government rather than their customers. This problem is masked during the boom years because the company does not need to make unpopular layoffs, pay cuts or other measures. But when things turn down again, the management concentrate hard on extracting money from the government instead of becoming more competitive.
Remember the film "The Italian Job", a gold heist in Italy where three BL Minis were used as getaway cars? The film studio approached BL and asked if they could have the Minis in exchange for the valuable publicity. The BL middle-management thought about this and then turned them down. The reason was basically ass-covering. Saying "no" was the safe option. Saying "yes" could lead to Questions In Parliment about taxpayers money being wasted giving away cars to film companies. The extra sales that would result from people seeing the Mini as the perfect city car were irrelevant in this calculation.
Sooner or later, Taiwan Semiconductor is going to go the same way as British Leyland.
Paul.
You are lost in a twisty maze of little standards, all different.
What are you talking about? I don't like Buchanan (he's too left-wing) but he is doen't speak in obscenities. And he may be wrong about the chopsticks (assuming he really complained about that) but he's accurate when he points at huge trade imbalances the US has with some countries. And yes, several of those countries are on the Pacific Rim. You don't have to be a "fire-eater" like Buchanan or a "poorly-educated American" to know that Japan, and to a lesser extent, China, are very tough about accepting imports.
When I'm singing a ballad and a pair of underwear lands on my head, I hate that. It really kills the mood.
-Tom Jones
Taiwan has never been as bad as the rest of the "Tigers" when it comes to cronyism. Granted, they've been under single-party control since the Nationalists escaped there, but a key differentiating factor in the "crony capitalism" economies is that ownership is concentrated in the hands of the families and friends of the ruling family. Though Taiwan is controlled by a single party, it's not the one-family (like for instance, Indonesia's Suhartos) type of party that is so corruptible. For better or for worse, free-market capitalism is the standard in Taiwan, and the government invests in industries instead of controlling them.
The big difference in Taiwan is that government approaches ownership from a strategic viewpoint, and they aren't investing so much to get family members rich as they are to try and jump-start industries. In Indonesia, Suharto would have pumped $100 million into a chip company and put his nephew in charge. In Taiwan, Morris Chang was able to get the government to invest $100 million in exchange for an ownership stake with the purpose of jump-starting a semicinductor industry. By just about any measure, the effort was a spectacular free-market success. The difference is that in a cronyist system, Chang would have not been concerned with profits - he'd be skimming off the top and not worrying about the details. The Taiwanese semiconductor giants are making profits in a difficult sector of the market - and that's the biggest difference between what happens when government invests in free-market companies versus what happens when government actually owns the company. When the government owns the company, you get Indonesia, Thailand, and the British Leylands of the business world. I'd take the Taiwan approach any day in comparison.
- -Josh Turiel
-- Josh Turiel
"2. Do not eat iPod Shuffle."