Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday that chairman Morris Chang (張忠謀) would replace Rick Tsai (蔡力行) as chief executive after the board of directors tapped Tsai to lead a new business division that will explore new growth engines in the green energy sector.
The move came as a surprise to industry analysts, as TSMC had managed the financial crisis better than most other semiconductor companies.
TSMC reported profits of NT$1.56 billion (US$47.5 million) in the first quarter, while its closest rival, United Microelectronics Co (聯電), posted losses of NT$8.16 billion for the same period.
“The future holds many challenges for us. We are building new business groups to help TSMC grow,” Chang told a media briefing yesterday.
“TSMC needs to develop long-term growth opportunities and for this we need the most qualified manager to take charge. Recognizing this, I have asked Dr Tsai to devote all his energy to this task and he has accepted the assignment,” Chang said.
Tsai will be the president of the New Business Development Organization, helping the chipmaker diversify into new businesses area such as solar cells and light-emitting-diode industries, which TSMC believes will see tremendous growth in future.
TSMC expects the new business group to help the company’s revenues growth by a 4.5 percent annual rate to US$14 billion, or US$15 billion in 2018, from last year, compared with less than 3 percent in its core business, Chang said.
“It is a good thing for TSMC to explore new growth areas at a time when growth in the overall semiconductor industry is slowing down. But the reshuffle of senior executives come as a shock, as Tsai performed well,” said Kenneth Lee (李克揚), a senior semiconductor analyst at Fubon Securities Investment Services Co (富邦證券).
The personnel shift takes effect today.
TSMC does not have a detailed plan about the development of the new businesses, but it expects the new businesses to generate US$2 billion revenues during the next few years.
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