Employees

Human Capital

Human capital is one of the most important assets of TSMC. The Company strives to provide employees with a challenging, enjoyable and rewarding work environment. In 2012, TSMC was named the “Most Admired Company in Taiwan” by CommonWealth Magazine for the 16^th    consecutive year.

At the end of 2012, TSMC had over 37,000 employees worldwide, including 3,614 managers and 15,264 professionals. Female managers comprised 11.4% of all managers, and non-Taiwanese nationals comprised 8.5% of all TSMC managers and professionals. In addition, when consolidating TSMC and all its subsidiaries, we had over 39,000 employees at the end of 2012. The following table summarized TSMC workforce structure at the end of February, 2013:

TSMC Workforce Structure

Recruitment

TSMC advocates equal opportunity employment, and its practices center on the principles of open-and-fair recruitment. We consider the candidate according to his/her qualification as related to the requirement of each position, rather than race, gender, age, religion, nationality, or political affiliation.

Although facing a stagnated global economy, TSMC’s continuous growth requires constant talent sourcing and recruitment activities to support its business. We recruited over 3,600 managers and professionals, and 2,000 assistants and technicians in 2012.

In order to cultivate a young talent pipeline for recruitment around the world, TSMC deploys a number of recruiting activities and university programs, including Joint Development Programs, University Shuttle Program, Summer Internship; Job Fairs in Taiwan, U.S., Singapore and India, Fresh Graduate Career Symposium, and Outstanding Student Research Award. These programs also advance novel or innovative academic semiconductor research.

People Development

TSMC has committed to cultivating a continuous and diversified learning environment. Under this mission, we established the Procedure of Employee Training and Education to ensure the Company’s and individuals’ development objectives can be achieved through internal and external training resources.

The Company provides employees with a wide range of on-site general, professional and management training programs. In addition to external experts engaged as trainers, hundreds of TSMC employees are trained as qualified instructors for delivering valuable know-how in internal training courses. During 2012, TSMC conducted 1,377 internal training sessions, for a company-wide total of over 780,000 training hours and a total of 520,000 attendees participating. Employees on average attended 21 hours of training. The total training expenses were almost NT$60 million. TSMC’s training programs include:

• New Employee Training: includes new employee basic training and job orientation. Furthermore, newcomers’ manager and our well-established Buddy System are actively engaged in the assimilation process.
• General Training: refers to training required by government regulations and/or Company policies. Such training includes subjects of industry-specific safety, workplace health and safety, quality, fab emergency response, languages, and personal effectiveness training.
• Professional/Functional Training: provides technical and professional training required by various functions within the Company. We offer training courses on equipment engineering, process engineering, accounting, and information technology, and so forth.
• Management Training: programs tailored to the needs of managers at all levels, including New, Experienced, and Senior Manager programs, as well as other elective courses.
• Direct Labor (DL) Training: enables production line employees to acquire the knowledge, skills and attitudes they need to perform their job well and to pass the certification for operating equipment. Training includes DL Skill Training, Technician “Train-the-Trainer” Training, and Manufacturing Leader Training.

Based on individual job nature, work performance and career development track, a tailor-made Individual Development Plan (IDP) is established for each employee. Meanwhile, our employees are provided with a comprehensive network of learning resources, including on-the-job training, coaching, mentoring, job rotation, on-site training and e-learning. They are also subsidized when taking external short-term courses, credit courses and degrees.

Employee Satisfaction

TSMC is committed to providing above-industry-average quality jobs to its employees, and it is dedicated to foster a dynamic and fun work environment. The Company encourages employees to maintain a healthy and well-balanced life, apart from their time spent working.

TSMC’s commitment in employee caring and its unceasing efforts as an advocator of employees’ work-life balance has earned it the prestigious first place as the “Happiest Corporation” of the Top 10 Happy Corporations, released by China Credit Information Service (CCIS), under its survey released in the second half of 2012.

To enrich employees’ work experience, the Company continuously implements programs to enhance employee caring, benefits, rewards and communication. The various initiatives include the following:

Employee Benefit Programs

• Diverse employee welfare programs: employees can enjoy 70 hobby clubs, 45 speeches covering diverse topics (in 2012), Sports Day, Family Day and so on. In addition, holiday bonuses, marriage bonuses, condolence allowances and emergency subsidies are also available to cater for employees’ needs.
• Convenient on-site services: cafeteria, dry-cleaning, convenience store, travel, banking, haircutting service, housing, and commuting assistance are accessible for employees in the fabs, ensuring the highest convenience of daily-life necessities for employees at work.
• Comprehensive health enhancement programs: physical care and psychological consultation services are available to employees to ensure their well-being. Five free counseling sessions are offered to TSMC employees on an annual basis, with extension available depending on the individual’s needs. Additional health enhancement programs provided by TSMC include weight control, medical check-up, smoking secession, exercise camp, massage service, sleep assistance, abdominal and neck x-ray, female care, blood donation, liver disease prevention, monthly seminar, etc.
• Premium Sports Center: with a variety of workout facilities to all employees and their families, as well as exercise sessions conducted by professional instructors available for employees’ choices to promote a healthier lifestyle.
• Flexible Preschool Service: the service, operated as per employees’ working time to meet their need for childcare, is available in Hsinchu and Tainan. In 2012, TSMC’s preschool was recognized as the “Premium Corporate Facility” by Taiwan’s Council of Labor Affairs.

Employee Recognition

TSMC sponsors various award programs to recognize employees’ outstanding achievement, both as a team or on the individual level. With these award programs, TSMC aims to encourage employees’ sustainable development that in turn adds to the Company’s competitive advantage.

The various award programs sponsored by TSMC include:

• TSMC Medal of Honor, presented exclusively by Chairman, recognizes those who contribute to the Company’s business performance significantly.
• TSMC Academy recognizes outstanding TSMC scientists and engineers whose individual technical capabilities make significant contributions to the Company.
• Outstanding Engineer Award for each fab and Total Quality Excellence Conference Award recognize employees’ continuous efforts in creating value for the Company.
• Service Award represents TSMC’s appreciation toward senior employees’ dedication and commitment to the Company.
• Excellent Instructor Award praises the outstanding performance and contribution of the Company’s internal instructors in training courses.

In 2012, TSMC employees continued to be recognized through a host of prestigious external awards, including Top 10 National Outstanding Managers Award, Outstanding Engineer Award, Outstanding Young Engineer Award, as well as National Industrial Innovation Award.

Employee Communication

TSMC values two-way communication and is committed to keeping the communication channels between the management level and their subordinates, as well as among peers, open and transparent. Our continuous efforts lie in reinforcing mutual and timely employee communication, based on multiple channels and platforms, which in turn fosters harmonious labor relations and creates a win-win situation for the Company and the employees.

A host of channels, including both face-to-face and virtual, are leveraged to maintain the unobstructed flow of information between the management level of the Company and the employees, including:

• Regular communication meetings held for the various levels of managers and employees.
• Periodic employee satisfaction surveys and follow-up actions based on the survey findings.
• Enhanced corporate employee portal (myTSMC 2.0):
  – Corporate messages, executive interviews, employee activities and so on are posted on the intranet for employees’ timely reference.
  – Important talks from Chairman are webcasted via the intranet to reach employees worldwide.
• eSilicon Garden: The website hosting TSMC’s internal publication, available in both Chinese and English, is updated on a bi-weekly basis with its content ranging from work to run.

To ensure that employees’ opinions and voices are heard, and their issues are addressed and solved, impartial and smooth voice submission mechanisms, including quarterly labor-management communication meetings, are in place to provide timely support.

• Complaints regarding major management, financial and auditing issues are directed to the following channels, which handle the complaints with high level of confidentiality:
  – The independent Audit Committee; and
  – Ombudsman system led by an appointed Vice President.
• The Suggestion Box provides a channel for employees to express their opinions regarding their work and the overall work environment.
• Employee care teams in each fab take care of the issues related to employees’ work and personal life.

The Company also sets and promotes policies and measures to ensure gender equity in accordance with employment laws and sexual harassment prevention policies to foster a fair work environment for employees of both genders.

All in all, the comprehensive communication channels provided by TSMC can be showcased by the following chart:

Retention

From the employee’s initial adaptation to professional and career development, TSMC works proactively to retain outstanding employees through creating an innovative, challenging, and fun environment. All these efforts contributed to a healthy turnover rate of 5.7% for 2012.

Compensation

TSMC provides a diversified and competitive compensation program that is competitive externally, fair internally, and adapted locally. TSMC upholds the philosophy of sharing wealth with employees in order to attract, retain, develop, motivate and reward talented employees. With excellent operating performance, employment at TSMC entitles employees to a comprehensive compensation and benefits program above the industry average.

TSMC’s compensation program includes a monthly salary, an employee cash bonus based on quarterly business results, and employee profit sharing when the Company distributes its profit each year.

The purpose of the employee cash bonus and profit sharing programs is to reward employee contributions appropriately, to encourage employees to work consistently toward ensuring the success of TSMC, and to link employees’ interests with those of TSMC’s shareholders. The Company determines the amount of the cash bonus and profit sharing based on operating results and industry practice in the Republic of China. The amount and form of the employee cash bonus and profit sharing are determined by the Board of Directors based on the Compensation Committee’s recommendation, and the employee profit sharing is subject to shareholders’ approval at the Annual Shareholders’ Meeting. Individual awards are based on each employee’s job responsibility, contribution and performance.

In addition to providing employees of TSMC’s overseas subsidiaries with a locally competitive base salary, the Company grants short-term and long-term bonuses as a part of total compensation. The performance bonus is a short-term incentive and is granted in line with local regulations, market practices, and the overall operating performance of each subsidiary. The long-term incentive bonus is awarded based on TSMC’s financial performance and is vested over the course of several years in order to encourage long-term employee commitment and development within the Company.

Retirement Policy

TSMC’s retirement policy is set according to the Labor Standards Act and Labor Pension Act of the Republic of China. With the Company’s sound financial system, TSMC ensures employees a solid pension contribution and payments, which encourages employees to set long-term career plans and raises their commitment to TSMC.