Taiwan Semiconductor
The Exchange

Taiwan Semiconductor: Trust is the Key

The New York Stock Exchange recently sat down with Elizabeth Sun, Taiwan Semiconductor's Senior Director of Corporate Communications and IR, to discuss the companies recent anniversary, how to build a top-flight IR function, and to get her views on the future of the business.

October 8th, 2017 marked the 20th anniversary of TSMC’s NYSE listing, and then in November TSMC celebrated the 30th anniversary of the company’s founding. What are the ingredients for your longevity?

We have always remained focused on doing what we do best and delivering on our promises to our customers. Our mission statement is actually quite straightforward: we want to be the trusted technology and capacity provider for the global IC industry for years to come. The secret behind our sustained success is that we remain focused in delivering for our customers and strive to make sure that in the areas where we need to compete, we are the best.

Over the last 10 years, TSMC has show a track record of steady growth. What are the driving forces behind that?

We believe our growth reflects the strong fundamentals underpinning our business. Over the last couple of years, the semiconductor industry experienced strong growth propelled by the proliferation of smart phones. However, we feel that the smart phone-driven growth momentum has peaked so have identified a number of new growth areas such as high-performance computing, which is the basis of artificial intelligence, machine learning, and virtual and augmented reality.

Another area is semiconductors for the automotive market, and particularly with respect to ADAS (Advanced Driver Assist System) or self-driving cars. Yet another area is IoT, where in the coming years more and more end devices will be connected and many of those devices will be intelligent. Given that computation within a given device relies on semiconductors, I think that suggests even more opportunity for growth.

TSMC is a perennially recognized as one of the leading companies in the Asia-Pacific region for investor relations. What’s your secret?

On a personal level, I believe I am very fortunate to work for a such a good company. Our company has a great value system – one that emphasizes integrity and commitment, which means that our investors can be confident that we operate with transparency and honesty. We also have a long track record of demonstrating that we sincerely care about our shareholders and we do our utmost to create value for them. Once we make a commitment, we deliver what we promised. Our IR team is also fortunate to work for a company that holds those values to heart and, therefore, much of our IR job is to make sure that we live up to our reputation.

On a tactical level, I think it’s important to effectively handle communications between the company and the vast investment community. Since we are a mega-cap company, we have thousands of institutional investors following us and yet, we only have a 4- or 5-person IR team. One way to communicate our message efficiently is to utilize the quarterly earnings calls as the base vehicle. Our quarterly earnings calls are always well-structured and we commit a lot of resources to prepare our management’s key messages and how we should answer analysts’ questions. By being prepared for those conference calls and having a live webcast available for replay with a lot of relevant and useful information made available on our website, it makes our IR job much easier.

What advice can you give to newly public companies in the US from Asia Pacific region in terms of building a successful IR program?

Collaboration, cooperation and working as one team will best reveal itself when you are facing challenges…

People define success differently, so depending on their objectives it can be different for different companies. In our experience, many U.S. investors are very knowledgeable about our industry and do a lot of homework before they invest, so a company’s IR and management team, when meeting investors, should be prepared for lots of intelligent questions. We need to give investors meaningful and insightful analysis, so we can help them understand the dynamics of our company better.

The essence of a good IR program is credibility, and if you don’t have that, you really have no IR to talk about. It’s very important to decide how to build that credibility; think carefully, understand your business and craft your message accordingly. Don’t over promise, and once promised, we should do our utmost to honor that promise. That will pay long-term dividends.

What is the biggest challenge you and your team have, and how have you overcome that challenge?

There are so many challenges, but at a high level the biggest challenge is how to mobilize a small team of 4 or 5 people so they can effectively serve thousands of investors.

We use technology to figure out the best ways to handle inquiries, and we try to do a better job there. Another challenge is to bridge the gap between the investment community with the management team. We are a technology company and many of our management team members are not well versed in capital markets. They know our industry very well but financial markets are a different thing, so we need to bridge that gap so our management will know what the investment community is looking for in our stock.

Collaboration, cooperation and working as one team will best reveal itself when you are facing challenges…the IR team at TSMC reports to the CFO, but our chairman and CEO are very supportive, too. Credibility, transparency and striving for shareholder value creation is critical to our mission, and that is something everyone agrees on.