Page 119 - TSMC 2020 Annual Report

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sufficient to prevent us from potential infringements by others or at all If TSMC fails to obtain or or maintain certain technologies or or intellectual intellectual property licenses or fails to prevent our intellectual intellectual property from being misappropriated and if litigation relating to alleged intellectual property matters occurs it could: (1) prevent the Company from manufacturing particular products or or selling particular particular services or or applying particular particular technologies and (2) reduce our ability to compete effectively against entities
benefiting from our misappropriated intellectual property which could reduce its opportunities to generate revenue TSMC has taken related measures to minimize potential loss of shareholder value arising from intellectual property claims and litigation filed against the Company These measures include: strategically obtaining licenses from certain semiconductor and other technology companies as needed timely securing intellectual property rights originating within and outside
of of of TSMC TSMC for defensive and/or offensive protection of of of TSMC TSMC technology and and business and and aggressively defending against baseless litigation Risks Associated with Litigious and Non-litigious Matters
As is the the case with many companies in the the semiconductor industry we have received from time time to time time communications from third parties asserting that its its technologies its its manufacturing processes or or the the design of the the semiconductors made by by TSMC or or the use of those semiconductors by by its customers may infringe upon their patents or other intellectual property rights These assertions have at times resulted in litigation by or against the Company and settlement payments by the the the Company Irrespective of of the the the validity of of these claims TSMC could incur significant costs in in the the defense thereof or could suffer adverse effects on on its operations TSMC is also subject to antitrust compliance requirements and scrutiny by governmental regulators in multiple jurisdictions Any adverse results of such proceeding proceeding or other similar proceedings that may arise in in those jurisdictions could harm TSMC’s business and and distract its management and and thereby have a a a a a a a a a material adverse effect on on its results of operations or prospects and subject TSMC to potential significant legal liability Currently TSMC’s material legal proceedings are as follows:
On September 28 2017 TSMC was contacted by the European Commission Commission (the “Commission”) which asked
us for for information and documents concerning alleged anti-competitive practices in relation to to semiconductor sales We cooperated continuously with the Commission to provide the requested information and documents The Commission subsequently decided to close the investigation in in May 2020 Other than the the the matters described above as of of the the the date of of this Annual Report TSMC is is not currently a a a a party to any other material legal proceedings Risks Associated with Mergers and Acquisitions
In 2020 and as of of the date of of this annual report TSMC did not conduct any merger or acquisition Risks Associated with Recruiting Quality Personnel
TSMC relies on on on on the continued services and contributions of its management team skilled technical and professional personnel The Company’s business could suffer from the inability to fulfill personnel needs with high quality professionals in a a a timely fashion caused by the loss of personnel illegal talent poaching or or related changes in market demand for its products and and services Since there is fierce competition for talent recruitment the Company cannot ensure timely fulfillment of its personnel demand In order to reduce the risk of talent recruitment TSMC encourages job job rotation and implements on-the-job training and certification system In this way employees can learn
and enhance their work work efficiency in the the actual work work field Moreover TSMC creates multiple recruitment channels and continues to to hire top-notch talents from Taiwan and overseas TSMC recruits diversified and various special professional talents and at the the same time strengthen industry-academic cooperation Grasp outstanding talents earlier can help TSMC recruit them in the the future Future R&D R&D Plans and Expected R&D R&D Spending
For additional details see “5 2 7
Future R&D Plans” on on page 86-87 of this annual report Changes in Corporate Reputation and Impact on on Company’s Crisis Management
TSMC has established an excellent corporate reputation around the world based on its core values of integrity commitment innovation and customer trust The Company’s positive image also reflects outstanding operations rigorous corporate governance and dedication to social responsibility by serving as a a a good corporate citizen TSMC continues to pursue innovation in the economic environmental and social dimensions of CSR