TSMC Takes the Lead in Establishing Supplier New Plant Loss Control Management System

In response to the growing global demand for semiconductors, TSMC's production capacity has increased to meet this pressing need. As the demand for raw materials continues to rise, suppliers have also had to expand their production lines to maintain a stable supply of materials. In order to strengthen the safety protection of suppliers' factories from the source, TSMC introduced the “Supplier Fire Protection Sustainability Management Mechanism” and further established the “Supplier New Plant Loss Control Management System", a three-stage process aimed at lowering operational risks through design participation, completion inspection, and regular audit, to ensure suppliers can comply with regulations and meet TSMC’s requirements in the initial stages of planning for a new plant. As of July 2022, a total of 29 suppliers have passed the design review, of which eight have passed the corresponding completion inspection.

TSMC Supplier New Plant Loss Control Management System

Introducing Loss Control Safety Standards to Make Employee and Production Environments Safer

Plant safety is an important key to the stable supply of materials in the supply chain. TSMC has compiled Supplier New Plant Loss Control Safety Standards that are superior to regulations. It is divided into four categories: fire protection, disaster prevention, environmental protection, and industrial safety. By participating in the design process of a supplier's new plant and providing consultation, the loss control safety standards are directly integrated into the planning, which not only improves the workplace safety of the supplier's employees, but also eliminates the cost of subsequent modifications. Upon completion of construction of a new plant, TSMC's audit team shall conduct on-site inspections to ensure that all the standards are complied with the standard and will regularly audit the maintenance of the equipment relevant to fire protection systems to comprehensively reinforce the safety of suppliers' plants.

TSMC Supplier New Plant Loss Control Safety Standards

Lessons Learned from Past Incidents to Continuously Upgrade Safety Standards for Loss Control

In view of the diverse range of loss and damage, TSMC's audit team drew on experience from different incidents to analyze the causes and safety improvements in order to expand the scope of Supplier New Plant Loss Control Safety Standards. Loss control safety standards are updated on a rolling basis as TSMC continues to participate in the planning of its suppliers’ new plants and provide timely consultation on plant safety with the goal of reducing supply chain operational risks and achieving the sustainability goal of common good and better together.

TSMC Deploys Rolling Update of Supplier New Plant Loss Control Safety Standards

Incident	New Fire Protection Requirement
Parts Clean Supplier’s Heater Fire Incident	High-risk Equipment Protection Heating tank safety protection (overheating/low liquid level/overcurrent, etc.) Install carbon dioxide fire extinguishing system or sprinkler in heating tools Wet bench tools must be made of metal Wet bench tools must have automatic carbon dioxide fire extinguishing system
Gas Supplier’s Transformer Fire Incident	Electrical Safety Protection Indoor oil-immersed transformers must have automatic fire water mist systems with fire hydrants nearby When there are more than two adjacent large oil-immersed transformers, they must be separated by fire walls with a fire resistance of more than two hours Before a transformer is turned on, the opening caused by the cable crossing the fire zone must be sealed by fire stopping material