Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) yesterday announced that he plans to retire in June next year, paving the way for a dual leadership to oversee the world’s largest contract chipmaker.
Chang’s announcement came as the chipmaker’s market value climbed to a historical high of NT$5.72 trillion (US$188.08 billion) yesterday, topping Intel Corp’s US$179 billion again.
TSMC’s market value was less than US$220 million when Chang founded the company 30 years ago.
Photo: CNA
Chang, 86, sought to alleviate concern over a major shake-up at the company, saying his retirement would not derail the company’s growth prospects, nor jeopardize its client relationships.
The company’s annual revenue growth forecast to 2020 will remain unchanged, Chang told reporters.
In 2015, the company set a five-year compound annual revenue growth rate of 5 to 10 percent.
TSMC achieved its target last year, he said.
“This year, our [revenue] growth will approach 10 percent in US dollar terms. In the next five years, that forecast will remain valid,” he said.
“In the longer term, the global semiconductor [industry] will outgrow annual global GDP growth, which is to rise 3 percent annually... TSMC’s growth will be even faster than that of the global semiconductor [industry],” he added.
TSMC would also maintain its good “structural profitability” under the dual leadership of co-chief executive officers Mark Liu (劉德音) and C.C. Wei (魏哲家), Chang said.
Liu is to take over the post of chairman, while Wei is to assume the role of chief executive.
Wei is to report directly to the board of directors, rather than Liu, which makes for a parallel leadership model.
Chang said he would not take any position at the company after he steps down in summer.
Addressing concerns over a potential reduction in client orders, Chang said: “That won’t happen.”
Liu and Wei have been taking care of clients’ needs since 2013, when they were appointed co-CEOs.
TSMC counts Apple Inc, Qualcomm Inc, Nvidia Inc and Hisilicon Technologies Co (海思半導體), a chip designing arm of Huawei Technologies Co (華為), among the early adopters of TSMC’s advanced technologies.
“This is a good time for Chang to retire, as the company’s profits have hit a record and the industry outlook is clear,” TrendForce Corp (集邦科技) semiconductor research manager JH Lin (林建宏) said.
“Besides, the company’s order prospects for next year are good, with orders from Qualcomm coming back for the company’s 7-nanometer technology,” Lin said.
Asked what challenges the company’s new chairman and CEO would face, Chang said that competition would always be the biggest challenge, like in any other company.
TSMC has one or two strong competitors in the area of advanced technology and a dozen more in legacy technologies, he said.
Chang said he has confidence in his two top managers’ ability to face these challenges, as their personalities complement each other.
Wei is good at making smart decisions, while Liu reflects on every issue, Chang said, adding that this combination would steer the company in the right direction.
All incumbent board directors have agreed to be nominated, and if elected, serve in the new board, TSMC said in a statement yesterday.
They have also agreed to support the company’s dual leadership under Liu and Wei, it said.
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