Rare public remarks by the man who runs Tim Cook’s supply chain.
Introducing COO Jeff Williams at TSMC’s 30th anniversary celebration Monday, CEO Morris Chang described his company’s relationship with Apple as brief but “intense.”
From Williams’ remarks (transcribed from the webcast):
The risk [for Apple of doing business with TSMC] was very substantial.
The nature of the way Apple does business is that we put all of our energy into our new products and then we launch them, and if we were to bet heavily on TSMC there would be no backup plan. You cannot double plan the kind of volumes that we do.
We want leading edge technology but we want it at established technology kind of volumes.
That may be what Dr. Chang is referring to when he mentions “intense.”
From the TSMC side it also means a huge capital investment. And it means ramping faster than the more careful yield plan that the industry is used to.
But together we decided to take the bet, take the leap.
And Apple decided—it’s our first engagement—Apple decided to have 100% of the new iPhone and new iPad chips [A11 application processors] sourced at TSMC.
And TSMC invested $9 billion and had 6,000 people working ’round the clock to bring up a [unintelligible] fab in a record 11 months and in the end the execution was flawless. And we’ve gone on to ship over half a billion chips together in that short window.
There are not many companies that will spend $9 billion on a single bet. And for that we thank you Dr. Chang.
My take: People talk loosely about “betting the company” on this or that strategy. This is the real thing.