Macronix Founder: A Miracle the Company Made Was Built from Scratch
TAIPEI, Feb. 2, 2023 /PRNewswire/ -- "I have always stressed that starting a business in the integrated circuit industry from scratch would be something quite challenging, but I made it happen," said Macronix International Founder and CEO Miin Chyou Wu. "Almost all the well-known Taiwanese companies who have well-trained employees and top-notch manufacturing facilities were funded by the local government. Building up a company from nothing as I did, I think it is truly a miracle." He added that it takes dedicated people, heavy investment, considerable time, and essential resources to start a business in the semiconductor sector.
Semiconductor projects are capital-intensive and often require investors' long-term investment. It can cost billions of dollars to build a semiconductor fabrication plant, notably acquiring land and purchasing equipment. It also may take at least six to seven years for such facility to begin generating revenue. In 1989, the year Macronix was founded and Taiwan was just starting to focus on the semiconductor industry, it was not easy to find sufficient funding and qualified employees. Back then, several major semiconductor-manufacturing firms, including United Microelectronics and Taiwan Semiconductor (TSMC), wouldn't have survived without the support from the government or large consortia.
By bringing together 40 talented engineers from Silicon Valley and with NT$2.4 billion (approx. USD 137 million) in hand, Wu, then in his 40s, founded Macronix in Taiwan with dedication and enthusiasm. "At that time, I signed the first loan guarantee, and my life would have turned out very differently had I failed," said Wu. He knew that starting a business was highly risky, but it was his vision of moving away from the reverse engineering mindset that had taken root in Taiwan that made him willing to take up the challenge.
Despite the lack of resources, Wu decided to buck the manufacturing model trending at the time on Taiwan and opted to position Macronix as an integrated device manufacturer (IDM) specializing in product R&D, manufacturing and sales, with the goal of creating its own system on a chip (SoC) brand. Macronix has now become the world's largest ROM and NOR flash memory provider in terms of market share following the firm's success in addressing the challenges when the business was still at an early stage, as well as in 2002 when it was on the verge of collapse. Looking back, Wu stated again, it is indeed a miracle that Macronix has made it this far.
Wu has built a legendary career in the semiconductor sector by overcoming various challenges and obstacles throughout the entrepreneurial process, likening himself to a warrior on a sacred mission. Nevertheless, rather than being a coincidence, his success is the result of all the achievements he accomplished by accumulating experience despite the harsh environment he grew up in. His unique experiences when he was young predestined him to lead a different life, he said.
Wu developed a resilient mindset by surviving the hardships he faced while growing up.
Wu arrived in Taiwan with his parents in 1949, when he was still an infant. He remembers that it was hard enough just to survive during those turbulent days. As a result of growing up in a difficult environment and being the eldest son in the family, he had to learn how to remain strong from a young age. He scrimped along with the simplest of lunches when in high school before going on to National Cheng Kung University, where he skipped the fourth class every Monday just so he could get the free bone broth in the cafeteria.
"Every Monday, the cafeteria had bone broth with a layer of clear oil that floated on the surface, so I went there early to get the soup as it was free," said Wu. The experience left a deep impression on him and he still remembers the taste of that oil. Wu added that he grew up on oily soup but he never complained about the hardships. "Just drinking the oil may lead to malnutrition, but I still did it, he said. "Those were the most difficult moments in my life."
Thanks to the hardships he experienced in his youth, Wu has developed the qualities of fearlessness and vigor, in addition to the ability to find ways to survive. It was such qualities that made him give up his high-paying and stable job at Intel in the US to start his own business from scratch, where it was far easier to fail than to succeed.
Macronix challenged Japanese manufacturers' hegemony by building the world's first computerized foundry.
With a bold approach to business operations, Wu drew the attention of the industry when he convinced some 40 engineers to return from the US to Taiwan, an effort that was noted by one of Silicon's Valley's leading newspapers, the San Jose Mercury News, as a pioneering step that started reversing the island's brain drain. However, there were increasing concerns about how Macronix would survive as well as maintain operations and build a fab with a mere NT$2.4 billion. This was also a challenge for Wu, but surviving with limited resources was something he had been doing and doing well ever since he was a child.
To address the lack of capital and purchase equipment so he could expand manufacturing capacity, Macronix, under his leadership, entered into a partnership with TSMC whereby the larger semiconductor maker funded the purchase of equipment that was then installed at Macronix's facility, with all products manufactured exclusively supplied to TSMC's customers until Macronix paid off the equipment three years later.
Macronix grew to become the ROM supplier to Japan's Nintendo by leveraging the opportunity presented when the Japanese government opened 20 percent of its market to US chip makers. Wu's flexible approach enabled Macronix to secure R&D funding at an early stage so that the company could compete in the market by building a fab of its own.
Wu's ambition was to use the power of innovation to challenge Japan, a country that had taken a 53 percent share of the global semiconductor industry, while establishing a footprint for Macronix by leveraging the resources of its partners. At the time, Japan was not only the largest semiconductor provider in the world in terms of market share, but also the leader when it came to semiconductor manufacturing processes, with six of the world's top 10 semiconductor makers based in the country. Wu's goal seemed an impossible mission at the time in that Macronix was just starting out and the Taiwanese semiconductor sector was not yet sufficiently mature.
Discipline was one of the main reasons why Japan dominated the global semiconductor industry and Wu was well aware that this was something Taiwan lacked at the time. To fill the gap with breakthrough innovation, after much deliberation, he suggested replacing manpower with computers and computerizing production lines at every stage in the workflow process.
"I was thinking about making proper use of data by deploying computers throughout the production line, so I approached a student who was working on his masters at the Institute of Statistics at National Tsing-Hua University, to integrate statistics into our production strategy," said Wu, The senior factory manager, who'd previously worked for Intel, felt that the emphasis on statistics was a risky idea. "The manager suggested using the traditional method first before shifting to the new approach," Wu said. "But I said no, as I thought that if I didn't do it right from the beginning, it would be even harder to make the transition later on."
Wu's persistence and the joint efforts of his team paid off: Macronix developed an electronic design automation (EDA) tool called NOVA in 1991, the precursor to sNOVA, a key solution that allowed the firm to maintain its competiveness and create quality products.
With NOVA, and later sNOVA, Macronix was able to manufacture quality products while empowering company employees to utilze the tool. "Today, new employees can gain access to Macronix's 33 years of accumulated experience while using its tools that aid in increasing productivity significantly by identifying problems quickly," Wu said. "Industry peers have followed suit as premium tools help create outstanding, innovative technologies, which are not only crucial in promoting the growth of Taiwan's semiconductor sector, but also the most important reason why the island has led the way in the global semiconductor market."
Following the launch of NOVA and under Wu's leadership, Macronix built a diversified portfolio, including 32-bit microprocessors, the world's first dual-port 10/100M bps Ethernet and high-speed Ethernet bridge controller IC. Additionally, the company developed controller ICs for LCD displays and digital cameras, as well as its well-known lineup of industry-leading memory solutions.
With the accumulation of experience, Macronix managed to deliver strong performance and became a major international manufacturer during the first decade following its inception, with annual revenue exceeding US$1 billion. At the same time, the business also became the first high-tech company in Taiwan to be listed as a class III stock, as well as the first Taiwanese company to be listed on Nasdaq. The company faced a crisis after entering its second decade, yet Wu, by focusing on R&D resources once again and continuously investing in innovation, helped Macronix avoid bankruptcy and achieve a turnaround following a three-and-a-half year struggle.
Macronix gained momentum by virtue of its long-term development strategy despite industry downturn.
In 2022, many semiconductor companies that had delivered outstanding performance over the past few years despite the Covid-19 pandemic were hit by the downturn in the global electronics industry as a result of the significant inflation and the Russia-Ukraine war. Nevertheless, Macronix still posted growth in net income after tax of NT$8.36 billion (USD 273 million), net earnings per share (EPS) of NT$4.52(USD 0.15) and a gross margin of 46.9 percent during the first three quarters of 2022, although its consolidated revenue dropped some 4.5 percent year on year to NT$34.4 billion (USD 1.12 billion).
Macronix delivered steady performance despite the headwinds, thanks to Wu's 10 years of efforts in developing non-consumer electronics applications for the process control, automotive and medical sectors. He pointed out that the company began implementing upgrades to customer services and applications many years ago.
"It is challenging for IC makers to implement changes," said Wu. "But we look forward to identifying and adding customers who attach importance to quality and acknowledge the value of a long-term relationship in a move to reduce the impact of the downturn in that most such customers have moderate yet steady needs while market demand for consumer electronics is highly volatile."
Macronix's success is also attributable to price stability that resulted from Wu's ongoing commitment to quality. "It is not easy to enter the high-end market," Wu said. "For the past 33 years, the company has been committed to providing quality solutions to customers. Our goal is to maintain price stability while continuously enhancing quality."
Given the fact that supply now exceeds demand, many industry peers are lowering prices to increase sales, but this approach has led to problems, according to Wu. He suggested maintaining price stability by improving the value of the product so as to avoid getting involved in vicious price wars. "Everything we do, including designing and launching new offerings, is done to lift the value of the product so that we can differentiate ourselves from others and stand out with premium solutions, he said."
When talking about Macronix's next step, Wu expressed high hopes for memory-centric solutions while looking forward to building a complete memory ecosystem. Based on memory-centric architectures, memory is no longer used just for storage, but can work with in-memory search (IMS) and computing-in-memory (CIM) to process data before transferring it to processors for further computing. Notably, the FortiX series 3D NAND/NOR flash memory that Macronix recently introduced is a one such memory-centric solution.
"The memory-centric approach will change the role of memory," said Wu. "Today, the bus is the most important component of a system. According to this concept, the system is like a highway where vehicles move slowly when there is high traffic, so the easiest way to make computing faster is to reduce traffic. With the evolution of artificial intelligence (AI), edge computing and other technologies, companies need to deal with the growing amount of data." He foresees memory-centric architectures gaining importance and Macronix rolling out memory-centric solutions as key products over the next five to ten years.
Only by abandoning the short-form video culture can Taiwan's semiconductor sector maintain competitiveness in the long term.
The achievements that Wu has accomplished over the past 30 years have earned him the Executive of the Year award at the second EE Awards Asia, organized by AspenCore, publisher of EE Times and EDN Taiwan/Asia. "It's really not easy to be innovative," Wu quipped when expressing excitement and gratitude for winning the award.
Looking into the future of the Taiwanese semiconductor sector, Wu pointed out that the established IC industry's biggest competitor is still mainland China, and that given the current situation, Taiwan will be challenged to maintain its leadership role. Most of the local industries, he added, lack expertise and competitiveness as a result of low technological barriers. "Based on our past experience, we should take a pragmatic approach to looking at how Taiwan can sustain its competitiveness, but honestly, we lack talented individuals with such a vision," he concluded.
As for his vision for Taiwan, Wu cited the establishment of the Miin Wu School of Computing at National Cheng Kung University (NCKU). "If you want to see results within ten years, you must do something wrong," he said, adding that systematic know-how is something that Taiwan now lacks and that the establishment of the computing school is a way to assist Taiwan in consolidating its role as the leader in the global semiconductor market by leveraging the world's leading systems and concepts. "It would be difficult to build a world-class company if you fail to look at things in the long term, he said."
Wu, who has helped nurture over 10,000 engineers through the Macronix Education Foundation and other training opportunities, also advised the new generation to plan their own career from a long-term perspective rather than focus narrowly on their current salaries. "They should spend the first 10 years of their career learning about technologies, as well as how to use them rather than only thinking about how to earn more than others," he said. "Otherwise, it's a waste of talent not only for Taiwan but also for the talented professionals themselves."
The young boy who grew up on bowls of oily soup has now become the helmsman of Macronix and the key enabler of the development of Taiwan's semiconductor sector. With extensive experience he accumulated over several decades, Wu has been and remains committed to contributing to the semiconductor sector despite the obstacles and challenges he has faced throughout his career. The 75-year-old entrepreneur now spends every minute of the day thinking about how Macronix can continue to excel and maintain strong momentum in the face of fierce competition while demonstrating its extraordinary value.
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SOURCE EETimes Taiwan and EDN Taiwan