TSMC’s Business Continuity Management (BCM) Introduction

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2011/EPWG/WKSP/012Session 2TSMC’s Business Continuity Management (BCM)IntroductionSubmitted by: TSMCWorkshop on Private Sector EmergencyPreparednessSendai, Japan1-3 August 2011

Security C –TSMC SecretTSMC’sTSMCs BCM IntroductionPaul B.C.ChenRisk ManagementTSMCChinese Taipei1 2009 TSMC, Ltd.OutlineSecurity C –TSMC Secret Supply Chain Overview TSMC’s BCM Introduction BCP Examples2 2009 TSMC, Ltd.1

Supply Chain Overview :From Electronic Service , System to miconductors 5,000B 1,400B 298B *Materials &Equipments 83B m, Internet,Broadcast CommunicationConsumer, Computer TSMCPioneer of Dedicated ICFoundry business model (1987)2010 revenue : US 13.3 billionManufacturing more than7,000 products (IC) from400 customers.*Data from SEMI report 2010. 2009 TSMC, Ltd.TSMC’s Risk ManagementSecurity C –TSMC Secret Enterprise Risk Management (ERM): TSMC established its Enterprise Risk Management (ERM)program based on both its corporate vision and its longterm sustainability and responsibility to both industry andsociety. ERM seeks to provide for TSMC’s adequatemanagement of risks on behalf of all stakeholders. ERM Strategy: Risk avoidance, risk transfer, risk mitigation and riskreductions are means to reduce corporate risks. TSMC Business Continuity Management (BCM) isestablished to maintain wafer production or servicesdelivery when a catastrophic incident occurs.4 2009 TSMC, Ltd.2

TSMC’s BCM IntroductionSecurity C –TSMC SecretObjective BCM includes guidelines and procedures to be applied by companywideemergency and nature disasters through risk control, emergencyresponse crisis management and business continuityresponse,Scope Potential accidents or incidents which could cause significant productionlosses to the company, such as fire, chemical/gas leakage, earthquake,flood, incoming utility supply shortage, process excursion, productcontamination, supply interruption, strike, sabotage, pandemic and ITunavailable, etc.Strategy A framework with clear ownership of related function/department tosafeguard customers and key stakeholders’ interest. Periodic review onthreat identification, exercise and update on BCM.5 2009 TSMC, Ltd.BCM Organization ChartSecurity C –TSMC SecretVP or committee chairman will host a business continuity meetingfor catastrophe events.Crisis ManagementBusiness ContinuityVP or Fab (Emergencygy Response Team, ERT))FacilityISEP/ ERCModuleDepts.IntegrationManufacturing6 2009 TSMC, Ltd.3

Four Segments of TSMC’s BCMSecurity C –TSMC Secret(example : Factory’s manufacturing)Preparednessbefore DisasterBCM Implementation after DisasterDisasterPreventiveRisk Control Risk Prevention “inadvance” is the foundationfor successful BCM:70-1 hr1- 48 hrshrs to tinuity Life safety Protection &Contamination / damagelimitation : Clear ERT ownership,procedure,, trainingpg&drills. Efficient ERCnotification andERT activation. Critical risks’identification &improvement(Earthquake, utility,leak, fire, IT etc.) Protect employeesafety viaevacuation plan. Production Recoveryor Relocation: Damageassessment Fast response anddamageassessment Verification viascenario test. Damage Assessmentand CrisisCommunication Maintain min.facility systemfor clean room. ProductionRecovery Activate Backupplan for criticalprocess orServices. Decide reentry(ERT) 2009 TSMC, Ltd.BCP (Biz Continuity Biz Impact)Operation Level (100%)Operation ceptableSpecpPlan & InvestGoalAcceptableSpecT0Time to Recover (TTR)1. Identify critical process or biz2. Define the goal of TTR & OP level3. Plan & DrillTimeExample : What is the adequate TTR fordifferent IT systems ?1. Fab MES system2. Report system (Fin , Manufacturing)3. Analysis system . 2009 TSMC, Ltd.4

Balance Cost and k to normalDisasterRecoveryOption A(Biz IImpact)RecoveryOption CRecoveryOption BAdequate TTR ?1. Fab MES system2. Report system3. Analysis systemHrsDaysWeeksCost oof RiskPrepareednessTime to Recover (TTR)Cost of Imppact &DowntimmeOperatiion LevelNormalOperationCost of Impact & downtime :F(X) (financial, productivity, reputation, other tangible/ intangible ) 2009 TSMC, Ltd.TSMC’s Earthquake Business Continuity ntinuous Drill and Improvement)Preparedness before QuakeBCM Implementation after QuakePreventive Risk Control:“Intrinsic Anti-Seismic”Expected Normal Operation LevelQuakeEmergencyResponse:Life safety &damagelimitationOperation LLevelIntrinsic Anti-Seismic Designtsmc’sAntiseismicModeling& DesignW k pointsWeakiNew Building:Design-in.Tools & Facilities:Anti-seismic &min. power 2009 TSMC, Ltd.BizRecovery:Rapid Recoveryresumes to normal. Rapid wafer /tool recovery.(Fab ,MM, PC )Sustain withhigher operationlevel.Old Building:CrisisManagement:Quick Assess &Resume EvacuationPlan(by intensity) AssessDamage via“Visual Simulation “ Assess &decide reentry( Fab-ERT ) Recoveryplan. (CSV,AM,Fin,QR ) Notification &gg nexttriggerlevel BCP ifneeded (RM,MM, CSV, AM,Fin)(Fab –ERT ) Drills.Suffer low operation level.Timeline for Quake Response5

BCM for Employee & Typhoon Morakot Disaster Relief Project : (Aug-2009)Typhoon Morakot struck south Taiwan, causing Taiwan’s most severe floodingin 50 yearsyears. (Peak of the rain: 1400mm/day1400mm/day, 600 dead) Direct Support : 1000 employees’ families were affected. Disbursed NTD 50 million for direct support.Conducted site visits by direct supervisors.Arranged other supports, such as “Water Truck” etc. Assisted to repair 94 damaged schools (elementary & middle)Provided NTD 50 millionInitiated and teamed up with suppliers (Electrical, IT, repair.)Book collection ( 50K) Pledged NTD 100 million to assist in the government’s overallrelief efforts. 2009 TSMC, Ltd.TSMC’s SupplySupply-Chain Risk ManagementRM / BCP SustainabilityCarbon/ Water Footprint(Green Product)pp y ChainGreen Supply(Green supplier award)Sustainability Forum(cross industries)S-C Carbon InventoryGreen Manuf. (LEED)CSRHazardous freeS-C RM :ESH ComplianceRM : Seismic OHSAS 18001 etc.CSRSupply Chain RiskGeographic RiskFiFinanciali l RiskRi kRegulationConflict MetalClimate change &Natural disasterBCP CapabilityS-C’s BCP & DrillRM & retGreenSocialRiskSustainability20082011 2009 TSMC, Ltd.6

ConfidentialSecurityC–SecurityCTSMCSecretThanks for Your Attention 2009 TSMC, Ltd.7

Crisis Management: Quick Assess & Resume Biz Recovery: Rapid Recovery Preparedness before Quake BCM Implementation after Quake L evel Expected Normal Operation Level Old Building: Wk i Evacuation Plan (by intensity) resumes to normal. Assess & decide reentry ( Fab-ERT ) Notification & trig

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