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5.5.5 TSMC Employee Welfare Committee-Recreation and Sports & Community for Employees and Families

The TSMC Employee Welfare Committee (EWC) was established under the requirements of Taiwan’s Employee Welfare regulations. Its key mission is to provide comprehensive welfare services to all employees in Taiwan, and help them keep a good balance between work and life. The EWC organizes employee activities, provides in-house recreational facilities and amenities, and extends these services to employees’ families

The committee consists of 25 members who are appointed by the management team and elected representatives from each function. The EWC is led by a Chairman and a Secretary General for daily operations.

In 2010, EWC expenditures amounted to about NT$325 million. Expenditures included subsidies for special occasions, holiday gift vouchers, emergency aid, artistic/recreational activities and departmental outings.

Activities promoting work-life balance in 2010 included:● Company-Wide Events: TSMC Sports Day and TSMC Family

Days. A total of 50,000 participants including employees and family members attended.

● Sports Activities: Over 100 sports competitions (basketball, ping-pong, badminton, swimming, etc.) were carried out and attracted 10,000 employees’ participation.

● Arts and Literature Activities: Over 42 expert talks, 16 family-oriented arts programs, and 150 movies were presented to the employees and their families with a total of 25,000 participants.

● Social Clubs: Sponsored over 50 social clubs (e.g. chorus group, cycling club, triathlon club, swimming club, aerobics club, belly dance club, calligraphy club, Tai-Chi club, etc). Approximately 6,000 employees participated in various club activities.

● Departmental Outings: Promoted relationship-building and interaction between colleagues and within departments by subsidizing group outing expenses. Some 25,000 employees and family members enjoyed the benefit of various outings.

● TSMC Sports Center/Fitness Center: Two large sports centers located in Hsinchu and Tainan and 7 on-site fitness centers promote regular exercise and employee health. We provide facilities and equipment competitive with gyms and health clubs. In 2010, the centers received a total of 17,000 visits including employees and family members, and served over 6,500 employees every month on average.

5.6 Corporate Security and Risk ControlTSMC works to create a safe working environment and protect proprietary information. Therefore, TSMC is dedicated to Proprietary Information Protection (PIP), physical security, employee security, and vendor security to preserve the assets, technology and interests of the Company, customers, employees and shareholders. TSMC takes proactive risk management to avoid possible security threats.

Basketball Game in the 2010 TSMC Windance’s Cup

2010 TSMC Family Day

TSMC not only uses and protects proprietary information properly, but also educates employees and vendors with regular awareness promotion and training. In 2010, the annual PIP refresher training was rolled out for all TSMC employees of fabs in Taiwan and China, with an 100% completion rate. If violations against PIP policies occur, warnings or punishments will be delivered depending upon its severity, including termination and legal action.

In order to ensure the physical security of workplaces, TSMC installs advanced physical access monitoring and control systems to ensure all physical access is properly authorized according to designated job functions and locations. All certified security guards must pass a series of background and qualification checks, and receive proper training such as etiquette, traffic directing, security spot checks, CPR, and foreign language. A notable compensation system such as guaranteed salary, group insurance, and recognition is established to motivate security personnel.

TSMC also provides various security consultations for employees. Our designated instructors help organizations to deliver our security training. Meanwhile, an exclusive security service website has been set up to provide personal and household security tips. In 2010, more than 10,000 new employees have completed the security and PIP related training to ensure the security measures are met.

TSMC regards vendors as the Company’s important partners, and thus provides security training and management to help them fit in with the Company’s security culture. All vendors must take PIP and work safety training, sign a nondisclosure agreement, and pass a work safety exam before receiving a working badge to make sure they fully understand and recognize related regulations. In 2010, TSMC conducted background checks for 65,000 badge-issued vendors to minimize security risk. TSMC also provides

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related security resources to vendor companies and helps them act responsibly. For example, TSMC hosts a suppliers’ security symposium every quarter. During the gathering, vendor companies not only share successful experiences, but also review improvement plans. The symposium successfully helps vendors follow TSMC regulations.

5.7 Safety and HealthOne of TSMC Chairman Dr. Morris Chang’s 10 principles of corporate social responsibility is to not only provide good job opportunities, but also to provide good remuneration and work environments. TSMC revised its safety and health policy in 2010, and set zero accidents as a new safety and health goal. To meet this goal, TSMC practices strict safety and health management procedures for hardware operations, and promotes continuous improvement programs. Based on this principle, TSMC seeks to improve the safety and health management performance of the semiconductor industry and supply chain through active social engagement.

Selection of material safety and health topicsTSMC has assisted the government in establishing regulations and promoting projects for a long time, and pays close attention to the views of academia, media, customers, and employees concerning occupational safety and health to understand the topics of greatest concern our stakeholders. We have concluded that the most material occupational safety and health topics are occupational safety and health management, emergency response, corporate contagious disease prevention, and disaster risk management, which are issues that TSMC have been working on for a long time. Workplace stress and employee health have recently become new topics of concern

for the government, society, employers, and employees, and an area that requires further attention. (Please refer to the 3.1 “Stakeholder Identification and Communication” in this report) The detailed measures are as follows.

5.7.1 Safety and Health ManagementTSMC believes that good safety and health management is an important part of the company’s commitment to take care of employees and their families, and a way of giving back to society and the community. In practice, TSMC’s safety and health management is based on the framework of the OHSAS 18001 management system, and uses information technology to continually improve our goals to prevent accidents, improve employee safety and health, and protect company assets. All TSMC fabs passed the 2007 version of OHSAS 18001 certification, and all fabs in Taiwan are also TOSHMS (Taiwan Occupational Safety and Health Management System) certified.

TSMC’s current safety and health management operations can be divided into several dimensions as below:

5.7.1.1 Hardware Safety and Health ManagementThe effectiveness of a facility’s hardware safety and health performance is largely determined in the design phase. TSMC follows local regulations, international codes, and internal standards when planning, designing, and building new facilities or rebuilding existing facilities for production, IT, general services, or other purposes. A designated team takes responsibility for safety and health management using the procedures below:

● New Tool and Chemical ESH Management ProcedureTSMC’s New Tool and Chemical Committee (NTCC) ensures that all new tools and chemicals meet international codes such

as SEMI-S2 as well as local regulations and TSMC standards. In order to reduce risks before operation, the committee not only reviews tool safety, but also evaluates the related safety issues of location, accessory equipment, safety interlock, and facility system connections. To comprehensively evaluate the safety of new tools and chemicals, the NTCC includes experts in a broad variety of fields, including process, equipment, facility and safety specialists. In 2010, the NTCC reviewed 58 new tools and 54 new chemicals.

● Safety Management of Change (SMOC)All new TSMC fab designs and changes in design or operation procedure in existing TSMC fabs that could alter safety or fire prevention conditions are required to follow SMOC procedure. SMOC cases undergo strict review by facilities, equipment, ISEP, and ESHP departments before implementation. There were 794 SMOC reviews in 2010.

● New Equipment Safety Sign-off ProcedureAll production-related tools and new facility systems must follow a three-phase safety sign-off procedure before operation.Phase 1: The tool sponsor must confirm interfaces between facility

systems and the new tool are under safe conditions before turning on non-HPM (Hazardous Production Materials) related utilities.

Phase 2: The tool sponsor must verify hazardous gases and chemical supply systems, fire protection, toxic gas monitoring, tool safety interlocks, laser and radiation protection, the tool’s local gas or chemical delivery system, and exhaust abatement before turning on the tool.

In phase 3: The tool sponsor must remedy any shortcomings found in phase 1 and phase 2, execute IR scans for electrical utilities, and put all safety requirements into the new tool’s regular maintenance procedures.