Taiwan Semiconductor Manufacturing , the world’s biggest contract chipmaker, is to rehire hundreds of staff it fired during the economic crisis, its chairman said Wednesday.
Morris Chang told TSMC staff that the worst of the crisis was over for the company and, “although the economic crisis continues, the company’s revenues are on the upturn and the second quarter will be much better than the first . . . We will not have further lay-offs”.
TSMC, which commands half of the global contract chipmaking market and employs 23,000 people, suffered a record drop in revenue in the first three months of this year, barely breaking even in the first quarter.
Since November, it has implemented measures to contain costs, including forced unpaid leave and the sacking of several hundred staff who did not score well in an internal evaluation programme.
Those dismissed found it “almost impossible” to find another job during the economic downturn and were infuriated by TSMC’s decision, said Yao Chin-yi, chairman of the TSMC Victims Self-Assistance Association, formed in March to help those who had lost their jobs – a total of about 700.
Angry former employees last month surrounded Mr Chang’s house to protest at the loss of their jobs and demand bigger severance packages.
Mr Chang, widely respected as the godfather of Taiwan’s semiconductor industry, said the incident arose out of a misuse of the employee evaluation programme and that TSMC “did not sufficiently consider the personal dignity of our staff, nor the difficulties of finding another job in such harsh economic conditions”.
He said he hoped to rehire by the end of this month those who had left, and would give additional compensation to those who did not wish to return. “I feel very much pained and regretful over the entire incident,” he said.
Mr Yao welcomed the move but said many employees remained wary of how they would be treated should they return to work.
Separately, Lai Shin-yuan, who chairs Taiwan’s Mainland Affairs Council, on Wednesday told reporters that the government would not allow Chinese investment into Taiwan’s semiconductor companies, including TSMC.
By maintaining even a slim profit, TSMC has weathered the downturn better than most technology companies. The company, which ended unpaid leave in April, expects second-quarter revenues to rise 80 per cent compared with the first quarter, and the factory utilisation rate to recover to 70 per cent from below 40 per cent.
Analysts expect TSMC to benefit from restocking by clients and firmer demand from China.
Donald Lu, a Goldman Sachs analyst, said China accounted for 13 per cent of global chip foundry demand with the proportion set to rise while demand in the west remained sluggish.
Bhavtosh Vajpayee, a CLSA analyst, wrote: “TSMC’s resilience through the slowdown has been proven again,” but warned that excess inventory might again emerge by the end of the year.
