TSMC assisted suppliers to strengthen their awareness and practice of ethics through the self-reinforcing cycle of standards verification, self-assessment, and online learning.

TSMC Takes Three Approaches to Strengthen Supplier Ethics Awareness and Practice

Grace Liaw

Integrity is TSMC’s most important core value. The Company established the "Supplier Code of Conduct" to promote and implement TSMC’s robust ethics codes into its supply chain. TSMC takes its suppliers’ compliance with these codes as a principal consideration when establishing business partnerships. In 2020, TSMC developed a comprehensive “Supplier Sustainability Standards” that details specific practices expected by these codes. Together with supplier self-assessment questionnaires and online interactive courses for suppliers, TSMC assists suppliers, through a self-reinforcing cycle of standards verification, self-assessment, and online learning, to constantly strengthen their understanding and practice of TSMC’s ethical codes, and also to elevate the ethical standards of the TSMC supply chain.

Developing a Self-assessment Questionnaire to Help Suppliers Review the Level of Implementation

TSMC’s suppliers elevate their understanding of TSMC ethical codes through the "Supplier Sustainability Standards" ,at the same time, suppliers must complete a "Supplier Self-assessment Questionnaire" every year to verify whether their compliance practices meets TSMC's requirements. In 2020, a total of 1,289 suppliers completed the questionnaire and 851 of them met TSMC’s requirements. For suppliers whose implementation of TSMC’s requirements needs further work, TSMC will first conduct an audit and provide counseling for improvement, and then provide training courses, to assist suppliers with learning and being compliant with TSMC’s requirements.

Providing Online Learning Courses to Drive Suppliers’ Employees and Their upstream Suppliers to Comply

TSMC conveyed the importance of TSMC ethical codes to suppliers through face-to-face seminars. In order to drive supplier employees and their upstream suppliers to fully implement the "Supplier Code of Conduct," in December 2020, TSMC further upgraded the business ethics related training material to online interactive courses, made available on the "TSMC Supplier Sustainability Academy" platform on the Supply Online 360 webpage. This resource provides suppliers and the general public with the opportunity to log-in, learn, and enhance their understanding of TSMC ethical codes at anytime and anywhere.

Implementation Cycle for TSMC’s Supplier Ethics Promotion

Integrity is TSMC’s most important core value and a key element for our supply chain sustainability. Through continuous communication and systematic action, TSMC shares and encourages our supply chain to adopt TSMC’s core value of Integrity and ethics codes as their code of conduct.

- T.C. Morris Cheng, Director of Corporate & Compliance Legal Division, TSMC

TSMC is committed to integrity as its business philosophy. In 2021, in response to the Responsible Business Alliance (RBA) inclusion of the source of conflict minerals procurement in RBA’s self-assessment questionnaire, TSMC has updated its supplier self-assessment questionnaire. Also, for this year, TSMC plans to add online insider-trading courses as a regulatory compliance topic, track the effectiveness of supplier training, and will complete a model “Corporate Business Ethics Code” in the second quarter of 2021. The model code will be provided to suppliers as a reference document to assist suppliers in strengthening their internal ethics management methods to elevate these ethics standards within the industry.

Important Milestones of TSMC’s supplier Ethics Promotion