Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman and chief executive officer Morris Chang (張忠謀) is among the 30 best CEOs in the world this year, according to the new issue of Barron’s published yesterday.
The results released by the influential market-focused US newspaper and Web site showed Chang was among four Asian chief executives who made it into the top 30 list this year.
The other three Asian CEOs are Yang Yuanqing (楊元慶) of the world’s No. 2 PC vendor Lenovo Group Ltd (聯想), Ma Huateng (馬化騰) of Tencent Holdings Ltd (騰訊), an entertainment and Web portal company in China, and Tadashi Yanai of Japan’s largest clothing retailer Fast Retailing Co, known for its clothing chain Uniqlo.
Sixteen CEOs on the list were from the US, including Warren Buffett of Berkshire Hathaway Inc and Jeff Bezos of Amazon.com Inc; eight hailed from Europe, including Bernard Arnault of LVMH Moet Hennessy Louis Vuitton and British chip designer ARM Holdings Ltd’s Warren East; and one each from Canada and Mexico.
Chang among 13 new CEOs on this year’s list compiled by Barron’s, which described the 81-year-old as “the soul of efficiency” and credited him with making TSMC Taiwan’s largest company and for leading a company that controls half of the world’s US$39.3 billion market for contract chip-manufacturing.
According to Barron’s criteria for entering its annual hall of fame, a respected CEO is required to have the ability to “motivate employees and develop products that resonate with customers.”
Chang founded TSMC in 1987 and has built the company into the world’s largest supplier of made-to-order chips, with its products used in computers, communication devices, consumer electronics and industrial equipment.
The company’s shares closed 1.53 percent higher at NT$99.5 yesterday in Taipei trading.
As of yesterday, the Hsinchu-based chipmaker had a market capitalization of NT$2.58 trillion (US$86.3 billion), according to Taiwan Stock Exchange data.
Last year, the company reported consolidated revenue of NT$506.25 billion and net income of NT$166.16 billion, with earnings per share of NT$6.41. Over the past 15 years, TSMC has seen revenue jump more than 11 times from NT$43.93 billion in 1997 and nearly 10 folds in profit from NT$17.89 billion over this period, the company’s data showed.
Despite the company’s leading position in the global foundry market and its plan to spend a record US$9 billion this year on new facilities to make chips for mobile devices, TSMC is likely to face stiff competition in the next two to three years from Intel Corp, Samsung Electronics Co and GlobalFoundries Inc, who have greater financial muscle, analysts said.
“New supply of 28 nanometer [nm] node solutions from Samsung and GlobalFoundries will commence from the second quarter this year onward as customers seek secondary suppliers to reduce risk,” Warren Lau (劉華仁), an analyst in Hong Kong with Kim Eng Securities Ltd, said in a report on Tuesday last week.
“Meanwhile, Intel’s high-profile win of a deal to build chips for Altera using its 14nm FinFET process indicates that it is now ready to engage with major customers following three years on the learning curve,” he said.
However, Carlos Peng (彭國維), an analyst at Fubon Securities Investment Services Co (富邦投顧), said over the longer term, TSMC would still be the final winner in the foundry business, which involves a wide variety of chips, small-batch production and many complex details and is different from the standard commoditized CPU process that Intel is good at.
“Intel is outstanding in the standard commodity CPU process, but compared to TSMC, Intel is just a junior in the foundry business,” Peng said in a report on March 14.
“If Intel fails to overcome these challenges or misses the timetable its management promised to customers, those customers will transfer their orders from Intel to TSMC. After all, TSMC is continuing to narrow the technology gap with Intel,” he wrote.