2015 TSMC Annual Report

• TSMC Vision, Mission & Core Values
• Letter to Shareholders
• Company Profile
  1. An Introduction to TSMC
  2. Market/Business Summary
  3. Organization
  4. Board Members
  5. Management Team
• Corporate Governance
  1. Overview
  2. Board of Directors
  3. Major Resolutions of Shareholders’ Meeting and Board Meetings
  4. Taiwan Corporate Governance Implementation as Required by the Taiwan Financial Supervisory Commission
  5. Code of Ethics and Business Conduct
  6. Regulatory Compliance
  7. Internal Control System Execution Status
  8. Status of Personnel Responsible for the Company’s Financial and Business Operation
  9. Information Regarding TSMC’s Independent Auditor
  10. Material Information Management Procedure
• Capital and Shares
  1. Capital and Shares
  2. Issuance of Corporate Bonds
  3. Preferred Shares
  4. Issuance of American Depositary Shares
  5. Status of Employee Stock Option Plan
  6. Status of Employee Restricted Stock
  7. Status of New Share Issuance in Connection with Mergers and Acquisitions
  8. Financing Plans and Implementation
• Operational Highlights
  1. Business Activities
  2. Technology Leadership
  3. Manufacturing Excellence
  4. Customer Trust
  5. Employees
  6. Material Contracts
• Financial Highlights and Analysis
  1. Financial Highlights
  2. Financial Status and Operating Results
  3. Risk Management
• Corporate Social Responsibility
  1. Overview
  2. Environmental, Safety and Health (ESH) Management
  3. TSMC Education and Culture Foundation
  4. TSMC Volunteer Program
  5. TSMC i-Charity
  6. Social Responsibility Implementation Status as Required by the Taiwan Financial Supervisory Commission
• Subsidiary Information and Other Special Notes
  1. Subsidiaries
  2. Status of TSMC Common Shares and ADRs Acquired, Disposed of, and Held by Subsidiaries
  3. Special Notes
• Financial Statements
  1. Consolidated Financial Statements for the Years Ended December 31, 2014 and 2013 and Independent Auditors’ Report
  2. Parent Company Only Financial Statements for the Years Ended December 31, 2014 and 2013 and Independent Auditors’ Report
• Contact Information
• Downloads
• Previous Annual Reports
• CHINESE

TSMC Annual Report >  2015  >  Operational Highlights > Manufacturing Excellence

Manufacturing Excellence

GIGAFAB® Facilities

Maintaining dependable capacity is a key part of TSMC’s manufacturing strategy. The Company currently operates three 12-inch GIGAFAB® facilities – Fab 12, Fab 14, and Fab 15. The combined capacity of the three facilities exceeded six million 12-inch wafers in 2015. Production within these three facilities supports 0.13µm, 90nm, 65nm, 40nm, 28nm, 20nm, and 16nm process technologies, including each technology’s sub-nodes. An additional portion of the capacity is reserved for R&D work on leading-edge manufacturing technologies, which currently supports the technology development of the 10nm node and beyond.

TSMC has developed a centralized fab manufacturing management system (Super Manufacturing Platform, SMP) to provide customers with greater benefits in the form of more consistent quality and reliability, improved flexibility to cope with demand fluctuations, faster yield learning and time-to-volume, and lower-cost product requalification.

Engineering Performance Optimization

As a professional semiconductor manufacturing and service company with a diversified product portfolio, TSMC’s unique manufacturing system is tailored to achieve production of high complexity with precise control and optimized efficiency. To achieve overall optimization of equipment, process and yield, TSMC has introduced engineering big data analysis and machine learning techniques and has applied statistical process control, advanced equipment control, advanced process control and circuit probing. To satisfy advanced and accurate process control and ensure stable production of high efficiency and effectiveness, the Company employs systems of engineering big data mining and analysis, intelligent tool tuning, and equipment chamber matching. Engineering analysis platform for decision making, integrated with intelligent operating systems to achieve self-diagnosis and self-reactive actions, has produced remarkable results in yield enhancement, workflow improvement, fault detection, cost reduction and R&D cycle decrement.

TSMC has further analyzed the correlation between physical measurement, Wafer Acceptance Test (WAT), defect test, Certificate of Assurance (CoA), circuit probe and production-related parameters, aiming to identify critical variables influencing product quality to optimize yield management and fulfill customers’ special process requirements as well as diversified product demand simultaneously.

Lean and Intelligent Operations

TSMC continues to drive manufacturing excellence through lean and intelligent operations. The Company has developed a lean work in process (WIP) line management system to control WIP levels precisely and equip a flexible demand/capacity modeling system to agilely support customers’ urgent demands and provide customers with accurate on-time delivery and best-in-class cycle time.

To continuously improve fab operating efficiency, TSMC has introduced Internet of Things (IoT) and intelligent mobile devices. The new applications help to improve data collecting, yield traceability, material transportation and workflow efficiency, especially at mature fabs.

Following its commitment to manufacturing excellence, TSMC has integrated the technology of advanced data analysis, smart diagnostic, self-reactive engine and operation knowledge to revolutionize the fab operation mode from “Auto” to “Intelligent,” optimizing operating efficiency and quality, maximizing cost effectiveness and accelerating overall innovation.

Raw Materials and Supply Chain Risk Management

In 2015, TSMC continued to hold review meetings periodically with teams from operations, quality control and business to proactively identify and manage the risks of insufficient supply capacity, quality issues and supply chain interruption. TSMC also worked with its suppliers to enhance performance, quality, delivery and sustainability, as well as to support green procurement, environmental protection and safety.

Raw Materials Supply

Suppliers Accounted for at Least 10% of Annual Consolidated Net Procurement

Unit: NT$ thousands

Quality and Reliability

TSMC’s strong industry reputation stems from its commitment to provide customers with the highest-quality wafers and best service for their products. Quality and Reliability (Q&R) services aim to achieve “quality on demand” to fulfill customers’ needs for time-to-market delivery, reliable quality, and market competitiveness over a broad range of products.

Q&R technical services assist customers in the technology developmental stages to design in superior product reliability. Since 2008, Q&R has worked with R&D to successfully establish and implement new qualification methodologies for High-k/Metal Gate (HKMG), and since 2013, for FinFET structures. In May 2012, Q&R began collaborating with Semiconductor Equipment and Material International (SEMI) through a joint IC Quality Committee to enhance product quality of the semiconductor supply chain. Recently, Q&R started working with R&D and the Backend Technology and Service Division to complete the Package-on-Package (PoP) technology development and in 2014 began outsourced production at major assembly and testing houses for mobile product applications. Since then, over-200 million PoP devices have been shipped to customers without major quality issues.

In 2014, Q&R conducted a deep-dive audit on new material suppliers for 20nm/16nm advanced technology and announced the incoming material quality requests to enhance the suppliers’ delivery quality. In 2015, Q&R extended the audit scope to include 10nm advanced technology suppliers and encouraged these suppliers to join the National Quality Control Circle Competition for self-initiative quality improvement. Most advanced technology material suppliers have achieved the goal of three sigma process control. Q&R also implemented innovative statistical matching methodologies to enlarge the manufacturing window with better quality control. The scope of the methodology includes raw materials, facilities, metrology and process tools, wafer acceptance test (WAT) data and reliability performance. Since 2011, Q&R tightened the post-fab outgoing visual inspection criteria for wafer quality improvement to Acceptable Quality Level (AQL) 0.4% from AQL 0.65%.

To sustain production quality and minimize risk to customers when deviations occur, manufacturing quality monitoring and event management span all critical stages – from raw material supplies, mask making, and real-time in-process monitoring, to bumping, wafer sort and reliability performance. Failure analysis and material and chemical studies play important roles in maintaining TSMC quality. These capabilities are applied from the early stages of process development through assembly and packaging, including analysis of incoming materials, airborne molecular contaminants, in-depth materials characterization for process development and failure analysis of customer returns. In 2015, TSMC continued to invest aggressively in state-of-the-art technology for materials analysis including electron and ion microscopes and surface analysis equipment. This resulted in further improvement in TSMC world-class cycle times and capacity in the area of transmission electron microscopy (TEM). Given the changing needs of our customers and the importance of ensuring the quality of incoming chemicals and materials, TSMC has implemented technologies to improve detection of metal impurities with a stronger emphasis on dynamic fault isolation and design debugging capabilities including the successful launch of our first focused ion beam (FIB) system dedicated to circuit editing. As a result, the Company has improved its ability to detect metal contaminants in incoming chemicals down to the parts-per-trillion level in 2014. Furthermore, in collaboration with customers and suppliers, significant progress has been made in dynamic fault isolation, traditionally a domain of integrated device manufacturers and fabless companies. TSMC improved the efficiency of these types of analyses through automation in 2015. With the growing presence of TSMC in the integrated circuit packaging area, the Company also bolstered failure analysis capabilities for multichip packages. These efforts, including the addition of new capabilities, will continue into 2016.

By facilitating fine bump pitch lead-free backend solutions for customer products, TSMC helped achieve compliance with the electronic industry’s lead-free and green IC package policies. By collaborating with the major outsource assembly and testing subcontractors, Q&R qualified and released Cu bump with elongated shape lead-free bumping and Cu bumping. This made possible lead-free Cu bump packages for 16nm FinFET technology products. It also enabled TSMC customers to introduce lead-free 16nm FinFET products with excellent assembly quality, and over 40 million units were delivered without major quality issues in 2015. Q&R also worked with R&D and qualified InFO technology through both component level and board level reliability validation to allow customer product implementation beginning in the fourth quarter of 2015. For mainstream technologies, Q&R qualified extreme low-leakage and high-endurance embedded Flash IP, Integrated Passive Device (IPD), and a hybrid of copper and copper-aluminum technology. Q&R continues to build reliability testing and monitoring to ensure excellent manufacturing quality of specialty technologies on automotive, high-voltage products, CMOS image sensors, embedded-Flash memory and micro-electro-mechanical system products.

Q&R is also responsible for leading the Company towards the ultimate goal of zero-defect production through the use of continuous improvement programs. Periodic customer feedback indicates that products shipped from TSMC have consistently met or exceeded their field quality and reliability requirements. In 2015, a third-party audit verified the effectiveness of TSMC quality management systems in compliance with ISO/TS 16949: 2009 and IECQ QC 080000: 2012 certificates requirements.