After Taiwan Semiconductor Manufacturing Co’s (TSMC) annual meeting last week, chairman Morris Chang (張忠謀) unexpectedly announced his intention to retire in June next year. He also unveiled his succession plan, in which co-CEO Mark Liu (劉德音) is to step up to become chairman following Chang’s retirement, leaving co-CEO C.C. Wei (魏哲家) as the sole CEO.
Many people were initially surprised by Chang’s announcement, before it sank in that it had just been a matter of time — after all, Chang is 86 years old.
Moreover, the past few days have shown a growing consensus among investors and major clients that the company should smoothly transition from the “Morris era,” as both Liu and Wei have ably served as co-CEOs since 2013.
TSMC celebrates its 30th anniversary later this month. Under Chang’s leadership, the company has become a dominant “pure-play” foundry, leaving its competitors behind as it claims more than 50 percent of the market share worldwide. The company has become one of the most prestigious Taiwanese firms in terms of finances, long-term investments, business vision, talent cultivation and ability to innovate, while it also garners praise for its efforts in corporate governance and social responsibility.
Chang’s succession plan has two goals: He plans to leave a legacy behind, and he wants to ensure that TSMC’s governance structure will continue to make it a champion of the semiconductor industry.
The company’s dual-leadership model is a unique style of governance that holds Wei, the designated CEO, accountable to TSMC’s shareholders and Liu, the future chairman, responsible for navigating the firm’s long-term development. In the meantime, TSMC’s board of directors are tasked with helping to mediate between Liu and Wei should disputes arise and with retaining good corporate governance, which is crucial to the company’s sustainable development.
The announcement highlights how most Taiwanese companies have long been complacent about succession planning. In a 104 Job Bank survey released last week, about 86.1 percent of the companies polled are not prepared for any succession scenario — only 13.9 percent have thought about enacting a succession plan.
Studies have shown that an operational succession plan affects the efficiency and flexibility of business decisions, as well as management turnover during a company’s leadership transition. It also helps to lower volatility in a company’s stock price in the short term and assures its prospects and governance for the long term.
That a relatively low proportion of local companies are committed to succession planning poses a serious threat to corporate health — especially because many founding chairpeople are getting old and companies struggle to recover from a loss of leadership as they face rapid change in the economic environment.
Not having a feasible succession plan in place could have devastating consequences for companies — from a lack of cohesion among members of the management team to serious effects on the company’s reputation and a departure of experienced professionals, which is especially obvious in Taiwan, where most family business leaders still expect next-generation family members, rather than professional managers, to take over the business.
In TSMC’s case, it remains to be seen whether Liu and Wei will handle their new roles competently as the company faces challenges from expanding its mobile, high-performance computing, automotive and Internet of Things platforms and creates value-added services for customers.
Chang has laid down a clear plan to hand over the company reins to his hand-picked executives — which is his last and the most important contribution to TSMC.
Speaking at the Asia-Pacific Forward Forum in Taipei, former Singaporean minister for foreign affairs George Yeo (楊榮文) proposed a “Chinese commonwealth” as a potential framework for political integration between Taiwan and China. Yeo said the “status quo” in the Taiwan Strait is unsustainable and that Taiwan should not be “a piece on the chessboard” in a geopolitical game between China and the US. Yeo’s remark is nothing but an ill-intentioned political maneuver that is made by all pro-China politicians in Singapore. Since when does a Southeast Asian nation have the right to stick its nose in where it is not wanted
As China’s economy was meant to drive global economic growth this year, its dramatic slowdown is sounding alarm bells across the world, with economists and experts criticizing Chinese President Xi Jinping (習近平) for his unwillingness or inability to respond to the nation’s myriad mounting crises. The Wall Street Journal reported that investors have been calling on Beijing to take bolder steps to boost output — especially by promoting consumer spending — but Xi has deep-rooted philosophical objections to Western-style consumption-driven growth, seeing it as wasteful and at odds with his goal of making China a world-leading industrial and technological powerhouse, and
More Taiwanese semiconductor companies, from chip designers to suppliers of equipment and raw materials, are feeling the pinch due to increasing competition from their Chinese peers, who are betting all their resources on developing mature chipmaking technologies in a push for self-sufficiency, as their access to advanced nodes has been affected by US tech curbs. A lack of chip manufacturing technology such as extreme ultraviolet lithography (EUV) would ensure that Chinese companies — Huawei Technology Co in particular — lag behind Taiwan Semiconductor Manufacturing Co (TSMC) and South Korea’s Samsung Electronics Co by five to six years, some analysts have said.
For Xi Jinping (習近平) and the Chinese Communist Party (CCP), the military conquest of Taiwan is an absolute requirement for the CCP’s much more fantastic ambition: control over our solar system. Controlling Taiwan will allow the CCP to dominate the First Island Chain and to better neutralize the Philippines, decreasing the threat to the most important People’s Liberation Army (PLA) Strategic Support Force (SSF) space base, the Wenchang Satellite Launch Center on Hainan Island. Satellite and manned space launches from the Jiuquan and Xichang Satellite Launch Centers regularly pass close to Taiwan, which is also a very serious threat to the PLA,