TSMC has a significant challenge on its hands when the topic of Environmental Social Governance (ESG) comes up. They are growing at a rapid rate, as the chip industry continues to grow. They are currently the technology leader from a minimum pitch, and use of advanced technology such as EUV, and gate all around (GAA) implementation. Yet, because most of TSMC’s manufacturing takes place in Taiwan, there are challenges with access to renewables from a space perspective, and due to the dependence of the island on Monsoons for water, there are at times shortages of water.

The lack of resources has not been a deterrent for TSMC from fully engaging in ESG. TSMC’s ESG report is a great blueprint for companies that are looking for how to improve their reporting structure and the risk management that goes along with rising temperatures, and the weather associated with climate change. It is very evident that TSMC takes ESG very seriously as Chairman Mark Liu serves as the Chairperson for the ESG committee. Not many other companies give this type of executive focus to ESG.

TSMC has developed some creative methods to engage employees in sustainability and has an annual ESG award, which means there is an annual contest. The contest is based on five strategic directions shown in figure 1.


Figure 1: TSMC’s five strategic directions for its annual ESG Award. (Source TSMC)

The 2021 contest had over 1257 entries, a significant increase over the 785 entries from the first year. The 2022 contest has just been kicked off. As part of the kick-off, TSMC had two warm-up programs. The first program was the ESG master challenge. This program encouraged employees to participate by offering a 60-second quiz on a daily basis. The daily quiz questions covered topics from global sustainability trends and the environment to TSMC’s ESG practices, which were ranked and scored by question difficulty levels. 10,092 employees participated in the program. TSMC encouraged participation by establishing a teamwork award, which then allowed them to participate in the empowerment and engagement award. 20 divisions inside of TSMC qualified to participate.


Figure 2. TSMC introduces the TSMC ESG Master Challenge to enhance sustainability among TSMC employees. (Source TSMC).

To encourage a circular economy. a winner of one of the last year’s ESG awards rolled out a program called PLASTIC to FABRIC. They encouraged employees to collect plastic bottles, which were then made into t-shirts. Over 66,000 plastic bottles were collected and recycled.


Figure 3: TSMC Launches “From Plastic to Fabric – Your eco-friendly t-shirt made from recycled plastic bottles to encourage employees to practice environmental protection in their daily life. (Source TSMC).

In all, more than 15,900 employees were engaged with the two programs over the 6-week period.

Now after kick-off, it’s back to work. Employees will have time to work on proposals as individuals or as teams. The employees will then make a presentation to a committee, which will decide on the winners. Once the winners have been decided upon, they are then given guidance and the opportunity to implement their ideas. The projects are monitored to see how the implementation is going. In 2021 16 ESG “amazing ideas”, were given the opportunity to work on implementation, they are currently being tracked within the TSMC organization. These are listed below.

Other award categories include:

  • ESG Outstanding Contribution
  • ESG Best Impact
  • ESG Empowerment and Engagement

The awards cover the entire spectrum of ESG, giving a nice balance to the programs, not all of the programs are focused on sustainability, but all will have an impact on TSMC. So, while TSMC must balance its long-term sustainability goals with the island’s natural resources and renewable allocation. By fully engaging their employees, they are giving TSMC an active advantage in reaching their ESG goals.

Dean Freeman

Dean W. Freeman, Chief Analyst at FTMA, has over 36 years of semiconductor manufacturing and…

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