TAIPEI – Taiwan Semiconductor Manufacturing Co. founder and Chairman Morris Chang will retire next June, handing the helm of the world’s largest producer of made-to-order microchips to the company’s two co-chief executives.
Breaking with tradition, Chang used his retirement announcement to issue a 2017 revenue forecast that surpassed analysts’ estimates. TSMC’s sales growth should be close to 10 percent this year in dollar terms, he said, a pace that surpasses the roughly 4 percent projected.
Mark Liu will succeed the 86-year-old Chang as chairman, and will have the final say in all business decisions and strategic direction. C.C. Wei will become chief executive officer, orchestrating operations but taking his cues from the board, Chang told reporters at a news conference Monday.
The announcement confirmed long-standing speculation about the heirs apparent and establishes a formal succession at the manufacturer of chips for Qualcomm Inc. and Apple Inc., its largest customer.
Chang, who stepped down as CEO in 2013 after the board installed Liu and Wei as his lieutenants, left little doubt he plans to step completely away from the corporation he founded in 1987.
“I came to my decision to retire gradually. Of course it had something to do with my age,” Chang said, emphasizing he will no longer hold any positions at the company come June. “As for when, I made that decision at the beginning of this year.”
Liu and Wei will inherit a company that in three decades established itself as the world’s pre-eminent foundry or contract chipmaker, about 30 times larger than local rival United Microelectronics Corp.
It spends billions on constant upgrades and new production facilities to keep pace with rivals like Intel Corp. and Samsung Electronics Co. in using the most advanced processing technologies.
Chang said Monday that TSMC expects annual revenue growth of 5 to 10 percent in the next few years.
Its shares have surged 21 percent this year thanks to projected demand for Apple’s new iPhones and other products. That helped make Chang a billionaire this year, according to the Bloomberg Billionaires Index. He owned 0.48 percent of the business directly as of Aug. 31, according to a filing to the Taiwan Stock Exchange.
Chang, one of the chip industry’s most respected figures, spent most of his life in semiconductors. Born in 1931 in the coastal Chinese city of Ningbo, his earliest memories were of moving through a succession of cities as his family fled before the Japanese occupation and, later, civil war between the Communists and Nationalists.
He passed through Hong Kong before heading to Harvard and then the Massachusetts Institute of Technology to study mechanical engineering, laying the groundwork for his future career.
In 1987, he took government capital and founded the company that’s since been credited with helping pioneer the modern chip foundry business and supporting the early development of companies from Nvidia Corp. to Broadcom Ltd.
“When we started, we were creating a new business model. People only recognized how disruptive a business model it was more than a decade later,” Chang said. “When we started out in 1987, no one thought Taiwan could be anything in the semiconductor sector. Now Taiwan is the center of the semiconductor sector.”
Growing semiconductor demand from China as well as the proliferation of smart devices connected to the internet spell major opportunities ahead for TSMC. It’s building capacity to meet that future demand, especially in the so-called internet of things. TSMC said last week it will build its first three-nanometer technology plant in southern Taiwan’s Tainan.
“TSMC will proceed with the blueprint Chairman Chang has laid out. Its leading edge in the foundry industry isn’t going to change in the next three to five years,” Taishin Securities Investment Advisory Co. Vice President Huang Wen-ching said. “The succession shouldn’t impact the stock or the fundamentals of TSMC.”
The task of ramping that up will now fall to Wei and Liu.
“The past 30-odd years, during which I founded and devoted myself to TSMC, have been an extraordinarily exciting and happy phase of my life,” Chang said in Monday’s statement. “Now, I want to reserve my remaining years for myself and my family.”