Perhaps it was his family's escape from Japanese bombing in China during World War II that gave Morris Chang his fighting spirit. "My positive attitude is probably related to my childhood," says Chang, 66, who settled in Taiwan in 1985 after nearly four decades in the U.S. He also made the right move when he took his father's advice to switch from literature courses at Harvard University to engineering at Massachusetts Institute of Technology. If he hadn't, the global semiconductor industry might have turned out differently.

Chang's determination helped create Taiwan's thriving high-tech industry, one of Asia's most important sources of strength. The chipmaker he started in 1986, Taiwan Semiconductor Manufacturing Co., is now an industry pacesetter. TSMC earned $528 million last year on revenues of $1.3 billion--a 41% return on sales that puts it among the world's most profitable companies. TSMC was the world's first pure foundry, fabricating silicon wafers for outside clients. It inspired hundreds of chip-design houses to go into business without building costly factories. Today, TSMC leads an established industry of foundries, which includes United Microelectronics Corp. in Taiwan and Chartered Semiconductor Manufacturing Inc. in Singapore.

Chang's long career in the U.S.--he worked at Texas Instruments Inc. and General Instrument Corp.--taught him to value the emphasis Western business places on employee welfare, innovation, and strong links to customers. He thinks Asia's beleaguered companies must adopt those values. "Asian management has to change dramatically," he says. U.S. companies are a good model. So is TSMC.

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