Wed, Oct 04, 2017 - Page 12 News List

Reporters’ Notebook: Chang leads by example toward retirement

By Lisa Wang 王玉玲

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang’s (張忠謀) succession will be one of the most closely watched handovers in the nation, coming as it does as more top managers and founding chairmen at Taiwanese electronics companies near retirement.

Chang has set a good example for his peers by announcing his retirement plans 18 months ahead of time in an effort to ensure a smooth leadership transition for TSMC’s shareholders, clients — which include Apple Inc and Qualcomm Inc — and the company’s 47,000 employees.

He had set the foundation for his announcement in 2013 when he introduced a co-chief executive system into the company, aimed at helping his eventual successors steer TSMC toward future growth.

“This is my last and the most important contribution to the company,” Chang on Monday told a room packed with reporters and photographers at TSMC’s Hsinchu headquarters.

Chang, 86, unexpectedly announced his retirement and a succession plan as the world’s top contract chipmaker prepares to celebrate its 30th anniversary later this month.

Under Chang’s plan, co-CEO Mark Liu (劉德音) is to succeed him as chairman in early June next year, while co-CEO C.C. Wei (魏哲家) is to become the sole chief executive.

Liu is to lead the board and have the final say on the company’s strategies, while Wei is to be in full charge of the day-to-day operations and strategy formation based on the board’s guidelines.

Wei is to have equal status to Liu, as he is to report directly to the board, not Liu. The board of directors has been given the task of solving any potential disputes between the two men.

The parallel leadership model cleverly avoids an internal power struggle and potential departure of one co-CEO as soon as the other becomes chairman.

Chang, who has been chairman of TSMC since its inception in 1987, said he would not hold any post at the company after he steps down in June.

After all, it is not the first time that Chang has made plans to retire, or semi-retire.

The first time was in May 2005, TSMC announced that Chang would step down as CEO in favor of then-president Rick Tsai (蔡力行) in July of that year, but four years later, Chang returned as CEO while Tsai became president of the New Business Development Organization unit.

The second time was when Liu and Wei were named co-CEOs four years ago.

Investors seemed to take the news that Chang was finally going to call it quits better this time than in 2013, with TSMC’s stock price seeing just a gentle fluctuation.

TSMC shares yesterday closed up 0.91 percent to NT$222.5, better than the TAIEX’s 0.04 percent gain.

Three years ago, the stock tumbled 1.9 percent when Chang named Liu and Wei co-CEOs.

“I am now more comfortable [with the two successors] than three, or four years ago” Chang told reporters on Monday.

They have significantly improved their abilities to strike a balance between being a businessman and being an engineer, he said, adding that four years ago, they were still acting more like engineers.

Daiwa Capital Markets analyst Rick Hsu (徐稦成) had a positive view on Chang’s retirement.

“We expect a smooth transition to the “post-Morris era” and see neutral impact on TSMC’s operations from this senior management change,” Hsu said in a report following Monday’s announcement.

“TSMC’s operational systems and managerial culture are well established, and the co-CEO structure has been implemented for four years,” Hsu said.

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