Jensen Huang on the phone call that changed everything | Lex Fridman in Taiwan
Jensen Huang recounts how a phone call from Morris Chang of TSMC in the mid-1990s changed Nvidia's trajectory, leading to a 30-year partnership built on trust, shared values, and long-term thinking rather than rigid contracts. The conversation interweaves this foundational business story with casual Taiwanese breakfast in Taiwan, emphasizing the importance of choosing who to work with over what to buy.
Summary
During an early morning Taiwanese breakfast in Taiwan, Jensen Huang shares the story of Nvidia's critical partnership with TSMC. In 1996, during the PC revolution and Windows 95 era, Nvidia was a struggling startup seeking foundry partners. Most foundries at the time—including Intel, AMD, and US companies like SGS-Thomson—required chip designers to license their intellectual property as a condition of access. Huang discovered TSMC and UMC, two relatively poor Taiwanese companies with no such strings attached. After calling TSMC's US office repeatedly without response and finally writing a letter to Morris Chang, Huang received a surprising phone call from Chang himself while his office was playing PlayStation in the background. This led to Huang's first trip back to Taiwan to meet both UMC and TSMC. Though both companies impressed him, Huang chose TSMC because of Morris Chang's unwavering philosophy centered on corporate governance, integrity, and long-term partnership. Chang promised, 'If we were to work together, I promise you we would jump through hoops for you'—a commitment he kept for the subsequent 30 years. Huang emphasizes that his decision was fundamentally about choosing who to work with rather than what to buy, and that maintaining loose, flexible agreements over ironclad contracts allowed both parties to discover solutions together through unpredictable circumstances. He credits this philosophy—keeping relationships fair over time, ensuring partners succeed, and leaving room for mutual growth—as central to both companies' continued success and mutual respect.
Key Insights
- In 1996, most US and Japanese foundries required chip designers to license their technology as a condition of providing manufacturing capacity, but TSMC had no such strings attached despite being a small, struggling company itself.
- Jensen Huang decided to partner with TSMC over UMC primarily because Morris Chang demonstrated a clear philosophy centered on corporate governance, integrity, and long-term partnership thinking rather than transactional business interests.
- Morris Chang committed to 'jump through hoops' for Nvidia, and this promise was kept consistently over 30 years, demonstrating that leadership credibility and personal commitment drive long-term partnerships.
- Huang argues that choosing who to work with is fundamentally different from choosing what to buy because chip manufacturing involves building together through unknowns, making rigid pre-negotiated contracts counterproductive.
- Huang states that ensuring partners' sustainability and success, rather than extracting maximum value, creates an environment where everyone rises together—exemplified by his supply chain's 300% contract increases while his own stayed flat.
Topics
Transcript
[0:02] Did your relationship with Morris Chang start when you came back to Taiwan? >> Yes, so we were looking for a foundry. And at the time, the foundry industry was was really >> We're by the way having Taiwanese breakfast. >> [laughter] >> Early morning. >> Yes. And so So we're looking for a foundry back then. Everybody was a foundry. Um NEC, Toshiba, Fujitsu, [0:33] Hewlett-Packard. Because the PC revolution had started. So Windows 95 had just come out. The lines Remember lines were wrapped around People waited to buy a box of operating system. >> Yeah, that moment on stage in the keynote when you're looking back at Windows 95. >> That was the moment I The…
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