Morris Chang, TSMC’s founder and former chairman, shares his thoughts on the industry (and particularly Intel) from time to time. When he does, those musings often make the news, which is exactly what’s happening with his latest comments about former Intel CEO Pat Gelsinger.
Speaking at the launch of his autobiography in Taipei, Taiwan, Chang suggested that Gelsinger’s focus on reviving Intel’s foundry business (instead of putting more resources behind AI) could have been Gelsinger’s downfall.
“I don’t know why Pat resigned,” Chang said, according to a report by Reuters. I don’t know if his strategy was bad or if he didn’t execute it well.”
Chang went on to say, “Compared with AI, he seemed to focus more on becoming a foundry. Of course, now it seems that (Gelsinger) should have focused on AI.”
He also added, “They currently have neither a new strategy nor a new CEO. Finding both is very difficult.”
If any of this sounds familiar, it might be because Chang warned that Intel was on the wrong path earlier. In 2022, for example, as Intel was about six months into its aggressive foundry expansion in the US, Chang sounded the alarm. As the founder of a company that was both a business partner and a potential competitor, his concerns didn’t change Intel’s plans. Now that we’re viewing the situation with the benefit of hindsight, it looks like Chang had a clear understanding of the pitfalls for Intel.
Pat Gelsinger
Former Intel CEO Pat Gelsinger Credit: Intel
In 2022, Chang described Intel’s chipmaking expansion as “a wasteful, expensive exercise in futility.” He explained that TSMC’s experience running a foundry in Washington state clarified the obstacles facing US fabs.
“We were extremely naïve,” Chang said, “in expecting comparable costs, but manufacturing chips in the US is 50% more expensive than in Taiwan.” That has stopped TSMC from building a new fab in Arizona, but that, too, was plagued by disruptions. The Arizona TSMC fab has only recently performed a successful yield test on a 4nm process.
TSMC’s founder also had concerns about Gelsinger himself. Reports suggest that Gelsinger may have blown up a proposed 40% discount on wafers that TSMC was making for Intel in recent years by making comments that Chang found disparaging. Chang called Gelsinger a “discourteous fellow,” after Gelsinger said “You don’t want all of your eggs in the basket of a Taiwan fab.” Gelsinger also said, “Taiwan is not a stable place.” Whether or not this had any role in Gelsinger’s departure, he’s out and Intel is shopping for a new one.