Zhang Zhongmou, the father of the hottest semicond

2022-07-27
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On June 5, the founder of Taiwan integrated circuit manufacturing Co., Ltd. (hereinafter referred to as "TSMC") and "father of semiconductors" Zhang Zhongmou officially retired, which also represents that TSMC will officially open the "post Zhang Zhongmou era". Under the leadership of Zhang Zhongmou, TSMC has grown from an unknown small company to a semiconductor enterprise with the highest market value in the world, and has brought more than half of the global chip foundry business into its arms

for TSMC, losing the leadership of Zhang Zhongmou is like losing its soul. Whether it can withstand the pressure from Samsung, Intel, SMIC and other competitors in the future is unknown

"father of semiconductor" retired

TSMC held a shareholders' meeting on June 5, after which Zhang Zhongmou officially retired. After retirement, zhangzhongmou no longer served as a director, consultant or chairman, realizing a complete "naked retirement". TSMC will implement the "dual head parallel leadership system": liudeyin, the current general manager and co CEO, will take over as the chairman of the board as the company's top decision-making representative, while Wei Zhejia, another general manager and co CEO, will take over as the president and report to the chairman and the board of directors at the same time

in fact, as early as last October, zhangzhongmou announced that he would retire. Born in 1931, he founded TSMC in 1987. At the age of 87, he is known as the "father of semiconductors" and "king of chips". Zhang Zhongmou pioneered the successful operation mode of wafer foundry and became the global leader in wafer foundry. TSMC's capital increased from NT $1377.5 million in the early days of the development of universal testing machine control software by StarTech to NT $259.3 billion now. The total market value once set the highest record in the history of Taiwan, China securities, and surpassed the semiconductor giant Intel to become the largest semiconductor enterprise in the world, At present, TSMC's chip OEM business has a global market share of 56%

in addition to being the only supplier of Apple's iPhone core processor chips, TSMC has 465 customers worldwide, including almost all of the world's major chip designers. Apple, Qualcomm, AMD, NVIDIA, Broadcom, NXP, Huawei chip departments Hisilicon, MediaTek and other companies all rely on TSMC's cutting-edge manufacturing processes to build advanced chips

TSMC is also the only enterprise in Taiwan, China to squeeze into the world's top 100 market capitalization, accounting for 4% of Taiwan, China's GDP and 6.8% of exports, creating 47000 jobs. In 2016, it contributed NT $36billion to Taiwan, China's tax revenue, ranking first among enterprises in the island. Zhangzhongmou once revealed that TSMC had only more than 100 employees in its early days, but now there are 47000, and its treatment is much higher than the average in Taiwan

in addition to announcing retirement, TSMC shareholders' ordinary meeting voted to recognize the 2017 business report and financial statements. TSMC's consolidated revenue in 2017 was about NT $977.45 billion, its after tax net profit attributable to the parent company was about NT $343.11 billion, and its earnings per share was NT $13.23. The shareholders' meeting also voted to issue a cash dividend of NT $8 per common share this year

the general meeting of shareholders of TSMC successfully completed the re-election of nine directors, including four current directors, namely, liudeyin, the co-executive director, Wei Zhejia, Zeng Fancheng, the vice chairman, and chenmeiling, the representative of the development fund of the Executive Yuan. In the part of independent directors, five current independent directors will be renewed, including Sir Peter bonfield, chairman of NXP semiconductor, and former American J. C。 Thomasyangibbs, chairman of Penney company, shizhenrong, founder of Acer, chenguoci, legal director of Jidian in the front desk, and Mike spenlint, former chairman of applied materials

risk of foreign capital holding

although TSMC plays an important role in the chip OEM market, 80% of the company's equity is held by investors other than Taiwan capital, specifically Dutch and US capital holding

the Beijing business daily learned that almost 100% of TSMC was Taiwan funded when it was established. The "National Development Fund" accounted for 48.3% of the shares and was the largest shareholder. Philips of the Netherlands later joined the company, accounting for 27.5% of the shares. Seven private enterprises such as Formosa Plastics accounted for 24.2% of the shares. After TSMC's listing, the "National Development Fund" gradually withdrew. By 2001, it held 12.1% shares and remained the second largest shareholder. After 2003, Philips gradually withdrew, and the "National Development Fund" still held 6.38% as the largest shareholder

although Zhang Zhongmou, Zeng Fancheng (vice chairman of TSMC), liudeyin, Wei Zhejia and other senior management teams hold tens of millions or even hundreds of millions of TSMC shares, they are not the founding shareholders of the company in terms of index. Their shares are all from the employee remuneration (year-end bonus) limited by 10 points of metal powder used by TSMC in the form of shares for 3D printing durable and high-quality aviation parts before 2005, Gradually accumulated on this basis

some legal person analysts in Taiwan, China believe that in the past, when foreign investors bought TSMC shares, many of them saw the aura of Zhang Zhongmou. They also believe that under the leadership of Zhang Zhongmou, TSMC has the opportunity to continue to improve. After Zhang Zhongmou retires, foreign investors are bound to inspect the TSMC shares they hold and sort them out. Although foreign capital will not be sold out by a large margin, a certain revision of the share price may be unavoidable

however, Zhang Zhongmou also expressed the hope that more investors from Taiwan, China would invest in TSMC. To this end, TSMC has been encouraging its employees with attractive cash dividends and bonuses. On february14,2017, the board of directors of TSMC approved the distribution of NT $7 cash dividends per common share, which reached a new high. The board of directors approved a total of about NT $44.84 billion in cash bonuses and cash compensation for employees, including NT $22.42 billion in cash bonuses and NT $22.42 billion in cash compensation for employees

it is reported that at the beginning of founding TSMC, Zhang Zhongmou established an effective salary system and incentive mechanism. In addition to basic salary and quarterly bonus, employee compensation also includes profit sharing (i.e. employee compensation). In the report submitted to the US Securities Regulatory Commission (SEC) in 2001, it was clearly proposed that 8% of the annual after tax distributable profits (after withdrawal of the statutory accumulation fund) should be retained as "profit sharing plan" (employee compensation), which would be distributed to all employees in the form of common shares, so that each employee would become a shareholder of the company. The "profit sharing plan" constitutes a part of the total compensation of employees, accounting for a higher proportion of the total compensation of the management and the senior management team. TSMC encourages its employees to hold shares for a long time and gain profits from them. This policy is an important means for TSMC to stabilize and attract talents

competitors' speed-up

for TSMC, Zhang Zhongmou is the founder and guardian. After his retirement, where will TSMC go

Zhang Zhongmou has prepared for a rainy day. According to the report provided by independent analyst Lu Xingzhi to smartkarma in October 2017, Zhang Zhongmou has planned TSMC's R & D, design, experiment, trial production and mass production in the next two years, including 7 nm, 5 nm and 3 nm process chips

Apple's most advanced iPhone x now uses TSMC's 10 nanometer chip. According to Bloomberg News quoting informed sources, the processor used in the next generation iPhone to be launched later in 2018 has been produced in TSMC. The processor chip is a 7-nm process, which is smaller, faster and more efficient than the 10-nm process used in the current iPhone X

however, according to Kang Zhao, the world president of the operator, TSMC will face more challenges and difficulties without the leadership of Zhang Zhongmou. "First of all, TSMC needs to cope with the competition from mainland chip OEM enterprises. In recent years, with the support of policies, semiconductor companies including SMIC and Ziguang group are competing to expand their production and will soon join the competition." It is reported that liangmengsong, once an important technical talent of TSMC, has joined SMIC as the co CEO to be responsible for technology research and development. Under the leadership of liangmengsong, SMIC is trying to promote the research and development of 14nmfinfet process. Based on the localization advantage, SMIC is putting pressure on TSMC in the middle and low-end market

in addition, the competition in the chip industry is becoming more and more fierce, and TSMC is becoming more and more dependent on its No. 1 major customer, apple, and customers in mainland China. In 2017, apple accounted for 22% of TSMC's operating revenue, compared with 17% and 16% of TSMC's sales in 2016 and 2015, respectively. But apple is also seeking to make its own chips, including processor chips, fingerprint chips and Bluetooth chips for airpods wireless headsets, to reduce its dependence on suppliers

it should be pointed out that TSMC's biggest competitor, Tristar, is threatening TSMC's market position step by step. "In the current competitive 7Nm process, Samsung introduced EUV technology one year earlier than TSMC. EUV technology is very important for 5nm and more advanced processes, which means that Samsung is likely to gain a leading edge over TSMC in the next 5nm process." Said Kang Zhao

it is reported that when several important customers of TSMC, such as NVIDIA and AMD, stepped down, it seemed that they also intended to distribute some orders to Samsung, resulting in the loss of TSMC customers. Samsung also proposed to increase its share in the chip OEM market from more than 7% to 25% in five years

according to Kang Zhao, in addition to market competition, the most important problem TSMC will face is talent succession. He believed that after Zhang Zhongmou retired, liudeyin served as the chairman and weizhejia as the president and vice chairman. Whether this dual head system is feasible remains to be seen. In 2006, Zhang Zhongmou once retired to the second tier and failed to succeed him. At that time, Zhang Zhongmou chose to serve as chairman and appointed cailixing as CEO. At that time, the industry generally believed that cailixing would become Zhang Zhongmou's successor. However, after cailixing became CEO, TSMC lost its customers and its performance was on the verge of loss. Zhang Zhongmou had to return to his post as CEO. Cailixing left TSMC in 2013

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