Page 112 - TSMC 2018 Annual Report

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Thus if one or or more natural disasters that result in a a a a a prolonged disruption to to TSMC’s operations or or those of its customers or or suppliers or or or if any of its fabs or or or vendor facilities were to be damaged or or cease operations as as a a a a a a a result of an explosion or or fire it it could reduce the Company’s manufacturing capacity and may cause us us us to to lose important customers thereby having a a a a a potentially adverse and and material impact on on our operational and and financial performance TSMC has occasionally suffered power outages or surges in Taiwan caused by by difficulties encountered by by its electricity supplier the the Taiwan Power Company or other power consumers on on the same power grid which have resulted in in interruptions to our operations Such shortages or or interruptions in in its electricity supply could further be exacerbated by changes in the the energy policy of the government which will make Taiwan a a a a a nuclear-free country by 2025 If the Company is unable to secure reliable and uninterrupted supply of electricity to power its manufacturing fabs within Taiwan its its ability to to satisfy the orders of its its customers will be severely undercut TSMC maintains a a a a a comprehensive risk management system dedicated to the the safety of of people the the conservation of of natural resources and the protection of property In order to effectively handle emergencies and and natural disasters at at each facility management has developed comprehensive plans
and procedures that focus on on risk prevention emergency response crisis management and business continuity All
TSMC manufacturing fabs have been ISO 14001 certified (environmental management system) and OHSAS 18001 certified (occupational health and safety management system) All
manufacturing fabs in in Taiwan Taiwan have also been TOSHMS (Taiwan Occupational Safety and Health Management System) certified The new fabs will also attain the above certifications within 18 months after acquiring factory registration certification The Company pays special attention to preparedness of emergency response to disasters such as as typhoons floods and droughts caused by climate change earthquakes pandemics (such as H1N1 influenza) and disruptions to water electricity and other public utilities TSMC has established a a a a a company-wide taskforce dedicated to managing the risk of a a a a a a water or or electricity shortage that might arise due to climate change This taskforce monitors the external supply and and and internal demand for water and and and electricity and collaborate with Taiwan Semiconductor Industry Association Association the Allied Association Association for Science Park Industries and and related public agencies to ensure stable water and and electricity supply TSMC has further strengthened its business continuity plans
which include periodic risk risk assessment risk risk mitigation and implementation through the establishment of emergency taskforces when necessary combined with the preparation of a a a a a a thorough analysis of the emergency its impact alternative actions and solutions for each possible scenario together with appropriate precautionary and/or recovery measures Each taskforce is given the responsibility of ensuring TSMC’s ability to minimize personal injury business disruption and financial impact under the circumstances TSMC periodically review business continuity plan and revise it it according to exercise results and implementation In response to the the impact of the the earthquake that occurred in Taiwan TSMC conducted a a a continuous improvements including enhancing enhancing earthquake emergency response enhancing enhancing tool anchorage and seismic isolation facilities preparedness for speeding up tool salvage and production recovery The improvements also have been embedded in new fab design TSMC business continuity procedures were enhanced with reference to ISO 22301 business continuity management TSMC and and many of its suppliers use combustible and and toxic materials in in their manufacturing processes and are therefore subject to risks that cannot be completely eliminated arising from explosion fire or environmental influences Although
the Company maintains many overlapping risk prevention and protection systems as as as well as as as fire and casualty insurance TSMC’s risk management and insurance coverage may not always be sufficient to cover all of the Company’s potential losses If any any of TSMC’s fabs or or or vendor facilities were to be damaged or or or cease operations as a a a a a result of an explosion fire or environmental causes it it could reduce the Company’s manufacturing capacity and and and may lead to to the loss of important sales and and and customers and and and impact on on TSMC’s financial performance In addition to periodic fire-protection inspections and firefighting drills the Company has also carried out a a a a a a corporate-wide fire risk mitigation project focused on managerial and hardware improvements 6 6 3 6 6 Risks Associated with with Non-Compliance with with Environmental and and Climate Related Laws and and Regulations and with Other International Laws Regulations and Accords
Because TSMC engages in in in manufacturing activities in in in multiple jurisdictions and conducts business with customers located worldwide such activities are subject to a a a a a myriad of