The myth-busts, hot takes, explainers, and tools worth keeping.
⚡Myth Buster· 1
⚡Myth Buster2:12:00
Intel Bet on EUV First -- and Still Missed It
Contrary to the idea that Intel simply ignored next-gen lithography, Intel was actually the biggest early investor in EUV in 2012 -- but still failed to commercialize it, illustrating the innovator's dilemma.
Intel invested more than $4 billion in EUV starting in 2012
Intel was slower to adopt and skeptical the technology would work
To this day no shipping Intel chip has been manufactured using EUV
Framed as a textbook case for why disruptive technology often needs a startup, not an incumbent, to commercialize it
“Intel actually saw extreme UV lithography, EUV first. So Intel was the biggest early investor in EUV, committing more than four billion to it in…”
“And I think even to this day, there is not a shipping Intel chip that was manufactured by Intel using UV.”
#Intel#innovator's dilemma#EUV
◆Hot Take· 2
◆Hot Take1:58:30
Why a China-Taiwan Conflict Is TSMC's Biggest Bear Case
The hosts argue that absent a computing paradigm shift, TSMC's moat is nearly unbeatable -- except for the geopolitical risk of China asserting control over Taiwan, which could halt global technological progress.
TSMC's process power can't be replicated with money alone by rivals like SMIC
The only realistic threats are a paradigm shift in computing or a China-Taiwan conflict
It's unclear whether TSMC's manufacturing know-how could be relocated under crisis
The risk has escalated noticeably in recent years per the hosts
“Absent a paradigm shift, this is TSMC's to lose.”
“Basically, all of our technological progress would stop.”
#geopolitics#Taiwan#China#bear case
◆Hot Take2:19:30
Where TSMC Ranks Among the Greatest Companies Ever
The hosts debate whether TSMC belongs in the top five or top ten technology companies of all time, ultimately landing on top ten given its near-impenetrable moat but lower public brand visibility.
Hosts agree TSMC now surpasses Intel in importance and value creation
TSMC intentionally avoids consumer branding, letting customers like Apple take the spotlight
Debate centers on whether it belongs above or below FAANG-level companies
Consensus: top ten, possibly the most successful B2B hardware company ever
“I think we can safely say at this point it surpasses Intel.”
“I don't know that there is a stronger moat that any company has in the entire world than TSMC.”
#company ranking#moat#grading discussion
✶Explainer· 2
✶Explainer39:30
How TI Fumbled the IBM PC and the MOS Transition
TI's talent exodus during the industry's shift to MOS semiconductors, combined with losing the IBM PC processor contract to Intel, cost TI its industry leadership and derailed Morris's path to CEO.
TI's top MOS engineers left for Mostech and were poached by Motorola in the mid-1970s
In 1980 IBM's secret Boca Raton PC project chose Intel's 8088 over TI
That decision standardized the industry on x86 architecture, away from TI
Morris had already been moved to consumer products, distancing him from the decision
“In 1980, so Morris has already transitioned to consumer products. IBM puts out a secret RFP bid proposal for a secret project that they're working…”
The Modern Semiconductor Value Chain: EDA, Fabless, IP, Equipment, Foundry
The hosts break down the five-part modern chip value chain -- EDA software, IP licensors, fabless designers, equipment makers, and foundries -- and where TSMC and ASML each sit.
EDA companies like Synopsys and Cadence make chip design software
IP companies like ARM license instruction set architectures
Fabless companies (Apple, Nvidia, Qualcomm) design chips without owning fabs
Equipment makers like ASML, Applied Materials, and Tokyo Electron sell to foundries like TSMC
“First, there's EDA, there's electronic design automation. This is the software that professional chip designers use to do their work.”
#semiconductor industry#value chain#EDA#fabless
❝Story· 7
❝Story04:30
Morris Chang's Wartime Childhood Across Three Conflicts
Before founding TSMC, Morris Chang survived the second Sino-Japanese War, World War II, and the Chinese Civil War, fleeing between Ningbo, Hong Kong, and Shanghai multiple times before age 18.
Born in Ningbo, China in July 1931
Fled to Hong Kong during the Second Sino-Japanese War, then fled again after the Japanese invasion
Family displaced repeatedly through Shanghai and back to Hong Kong during the Chinese Civil War
Escaped to the US for Harvard in 1949 via an uncle in Boston
“So this is crazy. Morris, before he turns 18, he has lived through three major wars: the second Sino-Japanese War, World War II, and the…”
#biography#founder origin story#Taiwan#China
❝Story16:30
The Bar-Room Hack That Taught Morris Electrical Engineering
As a mechanical engineer thrown into Sylvania's semiconductor division, Morris taught himself electrical engineering from a Shockley textbook and quizzed a senior colleague at the hotel bar every night.
Morris had no formal electrical engineering training when assigned to Sylvania's semiconductor unit
He studied Shockley's textbook alone in his hotel room each evening
He then bought drinks for a senior, harder-drinking colleague at the bar in exchange for tutoring
This informal mentorship became his primary electrical engineering education
“He, being the older colleague, didn't solve all my problems, but he solved enough so that I could move ahead. He was my main teacher…”
#self-teaching#mentorship#early career
❝Story24:30
Turning Around IBM's Failing Transistor Line at TI
Morris's first big win was rescuing TI's near-zero-yield transistor line for IBM's 7090 mainframe, doubling IBM's own internal yield within four months.
TI was contracted as a second source for IBM's transistor-based 7090 mainframe
TI's line initially had near-zero yield versus IBM's own 10%
Morris, applying mechanical engineering discipline, got TI's yield to 20% in four months
The win made him a rising star and got him sponsored for a PhD at Stanford
“Suddenly, even TI president Pat Haggerty knew Morris's name. IBM thought Chang had just gotten lucky, but when the company, IBM, sent engineers down to…”
From Rising Star to Passed-Over Executive at TI and GI
After being passed over for TI's CEO role and demoted, Morris resigned, took a COO role at General Instrument hoping to become its CEO, but resigned again within 18 months after realizing the culture fit was wrong.
Passed over as TI CEO despite building its most successful division
Moved to consumer products in 1978, then demoted to 'head of quality and people effectiveness' in 1983
Resigned from TI after 30 years
Joined General Instrument as COO but left within about a year, calling his CEO ambitions over
“I did not think that my aspiration to be the CEO of a major US company was in the cards.”
When TSMC was founded in 1987, Morris Chang received no founder equity at all -- the Taiwanese government and outside investors owned 100% of the company from day one.
TSMC's pre-money valuation was zero dollars
Government owned 50%, Philips and Taiwanese business leaders owned the rest
Morris received a government salary, not equity, and later bought shares with his own savings
Total initial capital raised was $220 million
“It was zero dollars. Morris Chang got no equity in the company. Zero.”
#founding story#equity#Taiwan government
❝Story1:38:00
The $9 Billion Bet-the-Farm Apple Deal
In 2012, an aging Morris Chang personally closed Apple's chip manufacturing deal, committing $9 billion and 6,000 employees to a dedicated plant -- a mutual bet-the-company risk for both sides.
Apple had previously used Samsung to fab its A-series chips, a direct competitor risk
TSMC invested $9 billion and 6,000 employees on an 11-month build for a dedicated Apple plant
By the iPhone 6 generation, all Apple chips were fabbed exclusively by TSMC
The deal is credited with cementing TSMC's ascent past Intel
“If we were to bet heavily on TSMC, there would be no backup plan.”
#Apple#strategic bet#manufacturing deal
❝Story2:06:00
Steve Jobs' Lowball Offer That Intel Rejected
In the mid-2000s Steve Jobs approached Intel CEO Paul Otellini about making iPhone chips, but Intel rejected what it viewed as a lowball offer, sending the business to Samsung and later TSMC.
Intel already supplied Mac processors and was a natural partner
Jobs' offer was deemed too low by Intel's CEO
Apple instead went to Samsung, then developed its own chips fabbed by TSMC
Framed as one of the biggest strategic errors in tech history
“Jobs made what Adelini considered a lowball offer, and Apple awarded the contract to Samsung.”
#Intel#Apple#missed opportunity
✦Tool· 1
✦Tool1:24:30
Inside ASML's EUV Machines That Only TSMC Can Fully Use
A deep dive into ASML's extreme ultraviolet lithography machines -- which vaporize molten tin with lasers 50,000 times per second to etch chips at sub-11-nanometer scale -- and why almost no one but TSMC can operate them at scale.
EUV machines cost roughly $200-300 million each and require four 747s to ship
They generate light by hitting molten tin droplets with a laser 50,000 times per second
ASML had to invent new mirror technology since normal mirrors absorb the wavelength
Only about 50 machines are made per year, with a long backlog
“It takes four 747s to ship one of these machines.”
“Yeah, and what I read is that the accuracy with which that laser needs to hit the drop of molten tin is more precise than…”
#ASML#EUV lithography#manufacturing technology
▲Takeaway· 1
▲Takeaway1:44:00
TSMC's Flywheel and the End of Falling Prices
TSMC's 27-year 17.4% compound revenue growth and its 2021 decision to raise prices for the first time since Morris's era signal a company that has flipped from commodity price-taker to price-setter.
17.4% compound annual revenue growth since its 1994 Taiwan IPO
Market cap grew from $4B at IPO to over $550B (now $1T+) at time of episode
TSMC announced price increases of roughly 20% in 2021, reversing decades of price cuts
$100B in planned CapEx over three years reinforces the moat
“Since the first IPO in Taiwan in 1994, TSMC has had compound annual revenue growth of 17.4% for 27 years.”
“Nobody's ever done this since the pre-Morris days.”