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E 4 Innovationandservice.Pdf 2018 Sustainable Our Focuses Ethical Innovation Responsible Green Inclusive Corporate Social Responsibility Our Business Governance and Progress Management and Service Supply Chain Manufacturing Workplace Common Good Appendix Report 37 Focus 2 Innovation and Service Pioneers in Innovations Innovation is the driving force behind TSMC's continuous growth. As Innovation Management the leading dedicated IC foundry, the Company attends to feedback from Sustainable Products customers, focuses on research and development, provides the highest standard of information security, and serves customers with leading-edge technology Product Quality and solutions to help them gain a competitive edge in the market through Customer Service high quality, low-power, next generation sustainable products. 5,100 & 8,800 93% >10 billion (NT$) Number of global patent grants exceeded Customer satisfaction rate reached 93%, surpassing 43,005 suggestions proposed by employees and 2,196 5,100, and registered trade secrets over 90% for five consecutive years, demonstrating proposed continual improvement cases, creating a 8,800 TSMC's good relationships with customers benefit of over NT$10 billion 2018 Sustainable Our Focuses Ethical Innovation Responsible Green Inclusive Corporate Social Responsibility Our Business Governance and Progress Management and Service Supply Chain Manufacturing Workplace Common Good Appendix Report 38 Innovation Management 2018 Strategies Long-term 2019 Targets Goals Achievements th Technology Leadership ● 5nm process technology in volume ● Volume ramp-up of industry-leading 7nm process ● Risk production of 5nm, the 5 production technology, the 4th generation technology to make use generation FinFET CMOS platform ☉ of 3D FinFET transistors technology for SoC ● Continuous investment and efforts on Target Year: 2020 leading-edge technology development to ☉ Target: 7nm process technology in risk production maintain TSMC's technology leadership in the semiconductor industry Intellectual Property ● Maintain a 5% increase in the number of ● Approved global patent applications >5,100 ● Approved global patent Protection global patent filings each year ☉ Target: >5,100 applications >5,100 ☉ Target Year: 2020 ● Patent protection : TSMC continuously ● updates the Company's patent portfolio to fully Exceed 45,000 in approved global patent protect its R&D achievement through expanding applications its portfolio ☉ Target Year: 2025 ● Trade secret protection : TSMC strengthens ● Maintain a 10% increase in the number of ● Registered trade secrets >8,800 ● Registered trade secrets >10,000 the Company's operations and intellectual registered trade secrets ☉ Target: >8,800 property innovation through the registration and ☉ Target Year: 2020 management of trade secrets, which involves ● Exceed 55,000 in registered trade secrets recording and integrating applications for trade ☉ Target Year: 2025 secrets that are competitive advantages for the Company 2018 Sustainable Our Focuses Ethical Innovation Responsible Green Inclusive Corporate Social Responsibility Our Business Governance and Progress Management and Service Supply Chain Manufacturing Workplace Common Good Appendix Report 39 Developing a Culture of Innovation Innovative Values to Maintain Corporate Vitality Innovation has been one of TSMC's core values for over 30 years since its establishment, and the Company has actively built a culture of innovation and a work 創新的價值觀 environment encouraging more innovation that is finely tuned to the ever-changing characteristics of the semiconductor industry. In addition to unceasingly develop leading-edge technologies to maintain TSMC's Encouraging Innovative technology leadership in the semiconductor industry, Innovation Approaches TSMC also designed an internal reward mechanism, TSMC hosts an annual Technology Leadership encouraging employees to practice in their work for a Idea Forum competition Intellectual Property Protection wide range of innovation to continuously strengthen covering topics from Intelligent Precision the organization's vitality. Meanwhile, TSMC also Operations, R&D, Quality Manufacturing Innovative assists customers, industry and academic institutions and Reliability, Corporate Green Innovation Cases Collaboration to drive cross-platforms innovation, including Planning Organization, and ● Converting Ammonia product innovations in collaboration with customers, Finance; with suggestions Nitrogen Wastewater into from grassroots, Continual Valuable Industrial-Grade technology talent innovation with academic Improvement Team (CIT) Materials institutions, and "green innovation" with our suppliers. , Total Quality Excellence ● Copper Wastewater Fully and Innovation Conference, Utilized as a Resource Technology Leadership and Tool Energy Saving ● Project Big Green Workshop. ● Utilize Zeolite Rotor TSMC University Collaboration Concentrators Programs TSMC continued to expand its research and ● Most LEED Certified ● TSMC University Research Semiconductor Industry development scale in 2018, and spent 8% of its Center Program Architecture Area in the total annual revenue on research and development, ● TSMC University Shuttle World reaching US$2.85 billion, a 7% increase from 2017. Open Innovation Platform® Program ● Intelligent Chilled Water Collaboration with world-class R&D institutesnote ● IC Layout Course Now the Company has 6,216 employees working on System R&D, a slight increase of 1% from the previous year. Such investment scale in R&D is on par with top tech companies worldwide and even surpasses some of the Company's leading counterparts. Note TSMC is a core partner of SRC (Semiconductor Research Corporation) and IMEC (Interuniversity Microelectronics Center), the U.S. and Europe's leading semiconductor technology R&D centers, and continues to sponsor the world's top universities in nanotechnology research to drive innovation and advancement in the field of nanoelectronics 2018 Sustainable Our Focuses Ethical Innovation Responsible Green Inclusive Corporate Social Responsibility Our Business Governance and Progress Management and Service Supply Chain Manufacturing Workplace Common Good Appendix Report 40 Continued Investment in Research & Development (R&D) Specialty Technologies ／ Integrated Interconnect & Packaging ● High-volume production of Gen-3 Integrated Fan-Out Package on Package (InFO- 2,479 2,881 3,392 3,901 4,367 4,766 5,123 5,423 6,145 6,216 PoP Gen-3) for mobile application processor packaging 2,850 Advanced Fan-Out ● Successful qualification of the fourth generation InFO-PoP advanced packaging 2,651 Packaging technology (InFO-PoP Gen-4) for mobile applications and Integrated Fan-Out on 2,211 2,067 Substrate (InFO-oS) for HPC applications 1,875 1,621 1,366 1,152 4,860 943 ● Developed unique 90nm BCD (Bipolar-CMOS-DMOS) technology offering leading- 657 Power IC / BCD edge 5-16V power devices and dense logic integration with competitive cost, as Technology the next generation mobile Power Management IC (PMIC) solution 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 R&D Headcount Embedded Flash ● Stable yield and reliability demonstration of 28nm node eFlash for high R&D Expense (US$ million) Technology performance mobile computing ● Mass production launch of new generation CMOS image sensors with sub-micron CMOS Image Sensor Despite the increasingly complex and difficult the fifth generation technology platform to make use pixel for mobile applications and development of Ge-on-Si sensor for three Technology challenge to continue extending Moore's Law, of 3D FinFET transistors, is on track for risk production dimensional range sensing applications with superior performance TSMC has focused its R&D efforts on enabling the in 2019. TSMC's 3nm technology has entered full Company to continually offer its customers first- development stage, and the definition and intensive to-market, leading-edge technologies and design early development efforts have been progressing for solutions that contribute to their product success. In nodes beyond 3nm. 2018, following the volume ramp-up of the industry In 2018, TSMC maintained strong partnerships with world-class research institutions, including SRC in the U.S. and leading 7nm (N7) technology, the R&D organization In addition to CMOS logic, TSMC conducts R&D on a IMEC in Belgium. TSMC also continued to expand research collaborations with leading universities around the world completed the transfer to manufacturing of 7nm+ wide range of other semiconductor technologies that for two grand purposes: the advancement of semiconductor technologies and the incubation of future talent. (N7+) technology, an enhanced version of N7. At the provide the functionality required by customers for same time, the R&D organization continues to fuel mobile SoC and other applications. the pipeline of technological innovation needed to maintain industry leadership. TSMC's 5nm technology, 2018 Sustainable Our Focuses Ethical Innovation Responsible Green Inclusive Corporate Social Responsibility Our Business Governance and Progress Management and Service Supply Chain Manufacturing Workplace Common Good Appendix Report 41 Applications Leading Technologies and Innovational Achievements First foundry to provide 16nm FinFET Radio Frequency (RF) volume production of sub-6Ghz RF chips for 5G mobile communications First foundry to begin 22nm Ultra Low Power RF (22nm ULP RF) risk production of ● ● ● Led the industry in Completed the transfer to Completed the transfer 5G millimeter wave (mmWave) RF chips ● Led the industry
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