Updating tsconfig "module" and "target" to "ES6" (module is past, ES is future. Please use ES so that they can deprecate module) solved the issue.
But after that, imports stopped working without extension.
So I had to add ".js" in import even though they were ".ts" files.
e.g. I had to import app.module.ts
file as following (note extension).
import { AppModule } from './app.module.js';