Taiwan Semiconductor Manufacturing Company (TMSC) pioneered the foundry business model by focusing solely on manufacturing customers’ semiconductor designs; today it is the largest contract semiconductor manufacturer in the world. Semiconductors are usually made from silicon and germanium and then “doped” to add elements to increase its conductivity. The semiconductor material is embedded with an integrated circuit known as a chip. Chips are used in every electronic device. Given the prevalence of chips in today’s world, and the significant resources required to make them, environmental considerations must be made across the product’s entire life cycle. TMSC is a leader in this field. In the design and manufacture of semiconductors, TMSC considers product life cycle, raw material mining, transportation, product manufacturing, water use, and waste disposal.
The company also works with its suppliers to produce carbon and water footprints for its products. Utilizing the precautionary principle, TSMC applies the European Union’s Restriction on Hazardous Substances Directive on a global basis and is actively working to use less hazardous chemicals. For instance, TMSC replaced its copper etching chemical with an alternative that is free of heavy metals. TMSC dedicates significant monetary resources to its research and development and capital expenditures budget. While these dollars are used to develop more advanced technologies, TMSC also dedicates these resources to minimize the company’s operational risks related to water and energy consumption.
While TSMC has leading practices across many environmental impact areas, including reduction goals for energy and water intensity, the company does not consistently report progress toward these goals relative to the baseline year. TSMC could improve transparency by ensuring its progress toward goals are clearly reported.
Industry: Information Technology
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 9/29/15 and may not reflect current opinions or subsequent events.