Over the past three years Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest wafer foundry, has diversified its investments, increasing its stakes in system-on-chip design foundry Global Unichip Corp., image sensor foundry VisEra Technologies Co. Ltd., and specialty chip packaging company Xintec Inc.

TSMC has all along been cautious about investing in other companies, yet it eventually decided to make that move in order to deepen its ties with its customers. But what has happened after TSMC took controlling stakes in the three companies? Who are the executives that lead these new players in the TSMC Group?

"I've been away from home for so long - I should go back!" TSMC had always been very cautious about investing in other companies, so when it came time to find a trusted helmsman for its new subsidiaries, the indispensable choice was Shang-yi Chiang.

Throughout the nine years that Shang-yi Chiang served as TSMC's senior vice-president for research and development, he lived alone in Taiwan, separated from his family in Silicon Valley - his wife, son and daughter, as well as his parents, both in their nineties.

Thus, it was only a logical matter of course for Chiang that, at the age of 60, he would tender his resignation, as of July 31 last year. But while Morris Chang approved Chiang's retirement, he found it difficult to let go of this renowned veteran of the semiconductor industry.

"You're still young and in good health. Won't you find it hard to get used to retirement life?" Chang reportedly asked Chiang in a display of concern. And before Chiang could even answer, Chang went on to say emotionally, "I myself have never retired, so I can't give you a response."

Chiang gave in when looking at his white-haired senior, who belying his age was still working untiringly at the helm of TSMC. Suddenly, his retirement seemed somewhat premature.

Consequently, Chiang decided to accept Chang's suggestion to serve as chairman of the boards of directors at TSMC-invested VisEra and Xintec.

"I didn't expect this to happen at all back then when I retired," says Chiang as he recalls this unexpected turn in his personal life, his tone betraying admiration for Chang's circumspection.

Morris Chang actually not only helped him think about his next career step, but even took into account Chiang's family circumstances, offering him the possibility of doing his new job in the United States. Instead of working full time in a Taiwanese office every day, Chiang could schedule the quarterly board of directors' meetings of VisEra and Xintec during the same week, so that he would have to fly in from the U.S. only once every three months.

"Papa Chiang," then TSMC's R&D boss, decided to take the company on a different path by developing its own proprietary manufacturing technologies. The rest is history, as subsequently TSMC stunned the world by independently developing 0.13-micron process technology. Up to today this breakthrough has allowed TSMC to play in the same league with IBM.

Morris Chang's Ace

Given that TSMC had always been very cautious about investing in other companies, Chang and TSMC CEO Rick Tsai needed someone they trusted to steer the two companies, which made Chiang indispensable, particularly because these investments were meant to play an important value-adding role in TSMC's future development.

TSMC's top management has long counted on Chiang, whom the company staff calls "Papa Chiang," for a reason. Jack Sun, who took over Chiang's post at TSMC after he retired, says he admires him most for his courage and persistence.

Sun recalls that TSMC and other global chip contract manufacturers were under heavy pressure around the turn of the century, because U.S. technology giant IBM controlled most advanced technologies at the time. During the era of IBM domination, the situation looked grim for the entire chip manufacturing industry. Those who didn't want to cooperate with IBM were doomed to failure.

"Papa Chiang," then TSMC's R&D boss, decided to take the company on a different path by developing its own proprietary manufacturing technologies. The rest is history, as subsequently TSMC stunned the world by independently developing 0.13-micron process technology. Up to today this breakthrough has allowed TSMC to play in the same league with IBM.

Charismatic 'Papa Chiang'

Yet "Papa Chiang" is not only a master of his trade, but also a charismatic leader who is able to attract the best from various fields. Both Jack Sun and Burn Lin, world-renowned inventor of immersion lithography and senior director of TSMC's Micropatterning Technology Division, count among the world-class semiconductor heavyweights that Chiang recruited for the company. And it's these two men who represent the new generation of leaders that runs TSMC as the company keeps advancing its process technology. TSMC employees used to affectionately call their unpretentious R&D chief "Papa Chiang," as if he were a member of their own families.

Chiang's leadership style of delegating authority and his unpretentious character have won him the respect of subordinates and superiors alike.

At TSCM it is common knowledge that "Papa Chiang" likes to hike on holidays and that his hiking buddies include a number of entry-level employees. From the top to the bottom of the TSMC hierarchy, mentioning the perpetually smiling "Papa Chiang" is like mentioning a family elder. In her blog a young TSMC employee even confessed that "Papa Chiang" is her idol.

Chiang's friendliness and charisma is actually praised throughout the entire semiconductor industry. Nicky C.C. Lu, president and CEO of Etron Technology Inc., reveals that Chiang was already a technology pioneer in the semiconductor business when he was still with Hewlett Packard (HP) in the United States. "When he was at HP, he was already a famous, friendly, very considerate person," Lu recalls. While Chiang does not talk a lot, he has charisma. "He is very good at coaching his subordinates," Lu notes.

Lu thinks that TSMC reeled in Chiang at the time not only because they had noticed his technological prowess, but also because of the way he relates to staff and his well-developed customer relations.

The Two Spearheads for TSMC Technology

Chenming Hu became TSMC's first-ever chief technology officer in 2001 after taking a three-year leave from his teaching career at the University of California, Berkeley. He and Chiang serve as the two spearheads for TSMC's technological advancements.

Very few people know that the complementary relationship Chiang and Hu enjoy began when they were classmates in the Electrical Engineering Department at National Taiwan University. In order to closely connect R&D and production, Shang-yi Chiang often personally visits the production lines to talk with employees.

What happened when Hu joined TSMC again highlights how much Morris Chang cherishes Shang-yi Chiang. Chiang had always been TSMC's top executive in R&D. So when the company decided to establish the new post of chief technology officer (CTO) and recruited Hu for it, Chang not only discussed the matter with Chiang beforehand, but also asked him to write the job description for the new post.

Chiang was not consumed by a sense of rivalry when Hu, a global star of the semiconductor industry, started at TSMC. Instead, he joined hands with his new colleague and old schoolmate to further widen the company's technological lead over its competitors.

TSMC's high yields in mass production in the 0.45 to 0.65-micron range are also owed to the concerted efforts of Chiang and Hu.

While "Papa Chiang" has retired from TSMC, his importance for the company cannot be refuted. Of the three companies in which TSMC took a controlling stake over the past three years - Global Unichip, VisEra and Xintec - TSMC board member F.C. Tseng is chairman of the first, but "Papa Chiang" chairs the latter two.

VisEra and Xintec are crucial for TSMC's strategy of expanding business into new-generation chip packaging technology. Who else but "Papa Chiang" could play the role of helmsman in TSMC's acquisition campaign?

Translated from the Chinese by Susanne Ganz

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Chinese Version: 台積電的活棋