Terry Gou paved way for TSMC-Apple cooperation: Morris Chang

Taipei, Nov. 29 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) founder Morris Chang (張忠謀) has revealed that Hon Hai Precision Industry Co. founder Terry Gou (郭台銘) paved the way for cooperation between the chipmaker and Apple Inc.

In the second volume of the TSMC founder's Chinese-language autobiography released on Friday, Chang said that he learned Apple had outsourced chip production to South Korea's Samsung Electronics Co. around the time the first iPhone was released in 2007.

When Samsung launched a direct competitor to the iPhone not long after, Chang said he thought TSMC's pure-play foundry services could provide an attractive alternative for Apple.

However, getting a foot in the door with the U.S. consumer electronics giant without an existing contact proved difficult, Chang said.

In stepped Gou, whose company was then one of the main contract assemblers of iPhones for Apple, Chang added.

Gou also happened to be the cousin of Chang's wife Sophie Chang (張淑芬), who told Chang on Nov. 9, 2010, that the Hon Hai founder had arranged for an Apple executive, the company's COO Jeff Williams, to visit the Chang home for dinner.

Williams told Chang Apple hoped TSMC could roll out Apple-designed logic ICs, with TSMC to have a gross margin of as high as 40 percent, according to Chang.

The following day, Williams held an intensive round of meetings with TSMC's management, after which Apple sent design, technology and procurement staff to Taiwan for follow-up discussion, Chang said.

Finally, in mid-December 2010, after a two-day meeting at TSMC's Hsinchu headquarters, a deal was struck for the Taiwanese firm to produce chips for Apple.

Chang said that cooperation between Apple and TSMC appeared briefly in jeopardy in March 2011, when Apple CEO Tim Cook seemed to be entertaining overtures from U.S. chipmaker Intel Corp.

But Chang said that when he met with Cook at Apple's headquarters the following month, the Apple boss told him Intel's pure-wafer foundry business was not up to scratch.

According to Chang, this led to the resumption of talks on future cooperation between Apple and TSMC -- which had been put on hold due to the Intel rumors -- in May 2011.

Apple is said to currently be one of the largest clients of TSMC, accounting for about one-quarter of the chipmaker's sales.

Chang said TSMC's strength was that the company was able to rake in reasonable profits from prices it set and was accepted by its clients.

After Chang retired as TSMC chairman in 2018, he said he lost touch with most Apple executives -- except for Williams.

According to Chang, Williams visited him in February 2024 and told him that TSMC was one of only a handful of outstanding business partners of Apple.