Morris Chang Saw Writing On The Wall 20 Years Ago For The Likes Of Intel And Samsung And Why They Would Never Be Able To Beat TSMC In Foundry Business

Nearly two decades ago, Taiwan Semiconductor Manufacturing Co. TSM founder Morris Chang explained why Intel Corp INTC and Samsung Electronics SSNLF wouldn’t stand a chance in the foundry business—and history is proving him right.

What Happened: During a 2007 conversation at the Computer History Museum, Chang addressed whether Intel or Samsung could compete with TSMC by using excess production capacity to enter the foundry market.

His response was blunt: "It's a completely different corporate culture."

He elaborated, recalling a conversation with a CEO who evaluated fab managers based on yield and cycle time metrics. "I said, we evaluate our plant managers by the satisfaction of our customers," he told Nvidia Corporation NVDA CEO Jensen Huang, who was moderating the conversation.

That difference, he said, meant rivals couldn't succeed even if they tried. "I decided right there that this guy is not going to be an effective competitor with me."

"I give you the same comment when you bring up Samsung and Intel. I have a great deal of respect for them in what they are doing, but I do not think that they will effectively compete with me in the foundry business even if they have excess capacity," Chang stated.

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After Chang's statement, Huang said that from a customer's perspective, the distinction between a semiconductor company of “force” and one of “agility and force” is critical.

"Agility is something that's tough to teach large corporations," he said, praising TSMC's culture of service and flexibility.

Chang added that TSMC's ability to manage nearly 50 customers within the same fab was a competitive advantage no other chipmaker had mastered. "We just learned it over 20 years—that's one of our trade secrets."

Why It’s Important: Today, TSMC is the dominant global foundry player with clients like Apple Inc. AAPL, Nvidia and Advanced Micro Devices AMD.

Despite renewed pushes by Intel and Samsung into the contract manufacturing space, TSMC's lead remains formidable, validating Chang's early insights.

According to a March 2025 Counterpoint research, TSMC dominates the global foundry market, steadily increasing its share from 58% in the second quarter of 2023 to 67% in the fourth quarter of 2024.

Samsung Foundry—TSMC's closest competitor—is losing market share, dropping from 12% to 11% during the same period.

Meanwhile, Intel’s foundry business has faced major hurdles, including $13 billion in annual losses last year, job cuts, a suspended dividend and a shareholder lawsuit over alleged concealment of internal issues.

The abrupt departure of CEO Pat Gelsinger also added to the turmoil.

Despite these setbacks, Intel remains determined to become the world's No. 2 foundry by 2030, aiming to surpass Samsung while competing with TSMC.

Last month, at the Intel Direct Connect event, new CEO Lip-Bu Tan reaffirmed the company’s commitment to its foundry ambitions.

Price Action: Intel shares have risen 2.32% year to date, while TSMC shares have declined by 4.87%. However, over the past five years, Intel stock has dropped 66.77%, whereas TSMC has surged 285.06%, according to Benzinga Pro data.

Benzinga's Edge Rankings give Intel (INTC) a 19.77% growth rating. Want to see how it compares to TSMC and Samsung? Click here for the full breakdown.