As it readies itself to celebrate its 20th anniversary in April, Taiwan Semiconductor Manufacturing Co (TSMC,
But before it can achieve that goal, it has to be seen whether the chipmaker will be able to sustain its past growth under a new chief executive, who in an unexpected reshuffle took the rein 19 months ago.
In the summer of 2005, TSMC's 75-year-old chairman Morris Chang (
The latest industry downturn of last year was the first trial that Tsai, 53 years old, had to manage since he was tapped as the successor of Chang.
Given that TSMC has performed well during the ongoing industry slowdown, investors might be inclined to give Tsai a vote of confidence.
TSMC's profits and revenues set record highs at NT$127.01 billion (US$3.85 billion), or NT$4.92 per share, and NT$317.41 billion, respectively, last year, demonstrating a much better managing of the inventory-driven downturn than its closest competitor United Microelectronics Co (UMC, 聯電).
UMC earned NT$32.6 billion, or NT$1.81 per share, last year, only one fourth of the net income made by TSMC. Ninety percent of UMC's net income was asset gains.
Given these remarkable results, TSMC planned to give a cash dividend of NT$3 a share for last year -- its largest ever -- and a stock dividend of 5 shares for every 1,000 held.
TSMC has recently begun widening its lead over competitors, industry analysts said.
Macquarie Securities and BNP Paribas Securities upgraded TSMC to "outperform," or reiterated a "buy" call on the firm, on optimism over earning improvement.
Many investment houses, meanwhile, maintained "hold," or "neutral" on rivals like UMC and Semiconductor Manufacturing International Corp (SMIC, 中芯), China's largest chipmaker.
Tsai's ability to implement the company's strategies -- his self-discipline and experience in the semiconductor industry -- is believed to have been one of the main factors behind TSMC's impressive performance.
Tsai started working at TSMC in 1989, two years after the semiconductor company was established. Before TSMC, Tsai had worked for eight years at Hewlett-Packard Co.
"Looking forward, we hope TSMC will be one of the world's top 100 companies, like GE or Microsoft," Tsai said last month during a press gathering in Hsinchu.
"Morris [Chang] is a coach and a good mentor to me," Tsai said.
Tsai knew that leading the company in an industry that has registered a slowing growth rate and become increasingly competitive would represent a challenge.
He believed that the overall industry would register a mild 4 percent to 6 percent growth in revenues this year.
The annual growth rate was 8 percent to 9 percent last year and in the high-teens during the 1990s.
"We are not making such statements now," he said in response to an investor's question about whether TSMC would outpace industry growth as Tsai's predecessor had told investors before.
In the short term, however, TSMC could rebound from the latest trough in the third quarter about one quarter earlier than rivals, JP Morgan analyst Roland Shu (
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
Swancor Renewable Energy Co (上緯新能源) yesterday announced plans for a 4.4 gigawatt (GW) offshore wind project off Miaoli County as part of its commitment toward Taiwan’s energy transformation, the company said in a statement. The “Formosa 4” project includes three deep-water wind farms 18km to 20km off the coast, Swancor Renewable CEO Lucas Lin (林雍堯) said, adding that planning for the project began last year. A proposal for Formosa 4 was this week submitted to the Environmental Protection Agency (EPA), the company said. Swancor Renewable jointly developed the Formosa 1 project, a 128 megawatt (MW) wind farm about 4km off Miaoli and the
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,