Taiwan Semiconductor Manufacturing Company Limited

Rating Overview

Taiwan Semiconductor Manufacturing Company Limited is Medium Risk.

Taiwan Semiconductor Manufacturing Limited (TSMC) is Medium Risk. The company often yields to political activism in shaping corporate governance, potentially alienating consumers, dividing employees, and harming shareholders. The company implements race and identity-based policies that replace merit, excellence, and integrity with preferential treatment and outcomes. The company occasionally embraces corporate initiatives that redirect its central focus from business goals to partisan policies and divisive issues at times. This approach fails to safeguard free exercise, free speech, and free enterprise.

Rating Criteria

Corporate Weaponization Risk Levels
Criteria	Risk Level
Cancellations	Medium Risk
Discriminatory Philanthropy	Lower Risk
Employment Protection	High Risk

Corporate Weaponization ⓘ

Corporate Governance and Public Policy Risk Levels
Criteria	Risk Level
Advocacy Bias	High Risk
Funding	Lower Risk
Political Actions	Lower Risk

Corporate Governance and Public Policy ⓘ

Rating Criteria Detail

Criteria Risk Level Rationale

Corporate Weaponization

Criteria:

Has canceled customers, suppliers, or vendors due to their political views or religious beliefs OR corporately boycotts, divests, or sanctions regions, people groups, or industries.

Risk Level:

Medium

Rationale:

TSMC integrates ESG into its business practices. From its Supplier Code of Conduct: “Suppliers shall establish and report against an absolute corporate-wide greenhouse gas reduction goal. Energy consumption and all Scopes 1, 2, and significant categories of Scope 3 greenhouse gas emissions shall be tracked, documented, and publicly reported” (1). From its 2024 Sustainability Report: “The compensation of TSMC’s CEO and vice presidents is governed by the Company’s bonus policy, which covers the achievement of both corporate operational goals and personal annual objectives…. Personal annual objectives include operational goals and ESG achievements” (2). From its 2023 Sustainability Report: “TSMC aims to integrate ESG into the operations to create shared value for a sustainable future” (3). The company integrates DEI into its supply chain. From its Supplier Code of Conduct: “Suppliers shall firmly believe in the value of diverse workplaces and cultivate future talents under the premise of mutual tolerance…” (4). TSMC promotes divisive sex and gender policies. Its Supplier Code of Conduct requires international vendors to include sexual orientation and gender identity in their nondiscrimination policy (5). However, the company has not canceled customers, suppliers, or vendors based on political views or religious beliefs (6).

Criteria:

Charitable giving (including employee matching programs) policies or practices discriminate against charitable organizations based on views or religious beliefs.

Risk Level:

Lower

Rationale:

TSMC does not appear to discriminate against charitable organizations based on views or beliefs (1). The company’s charitable giving focus areas are: “caring for the elderly, promoting filial piety, caring for the disadvantaged, and protecting the environment” (2).

Criteria:

Employment policies fail to protect against viewpoint or other discrimination and/or are ideological in nature.

Risk Level:

High

Rationale:

In 2024, news surfaced of multiple class action lawsuits taken against TSMC for alleged “anti-American” discrimination that disproportionately favored Taiwanese hires (1). The company offers unconscious bias and DEI training to its employees (2). TSMC appears to prioritize diversity over merit in its leadership composition. From its Corporate Governance Guidelines: “Diversity of backgrounds (including gender, age, and culture) of Board members shall also be considered” (3). The company protects its employees against viewpoint discrimination (4).

Corporate Governance and Public Policy

Criteria:

Uses corporate reputation to support causes, organizations, or policies hostile to freedom of expression.

Risk Level:

High

Rationale:

TSMC is aligned with the Paris Agreement, which entails a commitment to net zero carbon emissions by 2050 (1). The company supports DEI within its business practices, hosting a Research and Development Diversity and Inclusion Committee (2). TSMC supports DEI within its business practices. From its Global Inclusive Workplace Statement: “We are committed to fostering an inclusive culture where every employee feels valued and empowered to contribute to our mission and provide excellent service to our global customers” (3). The company supports ESG within its business practices. From its 2024 Sustainability Report: “To us, ESG is not merely a responsibility; it is fundamental to our operational resilience, competitiveness, and long-term value” (4). TSMC supports ESG within its business practices, hosting an ESG Steering Committee (5).

Criteria:

Uses corporate funds to advance ideological causes, organizations, or policies hostile to freedom of expression.

Risk Level:

Lower

Rationale:

TSMC has not used corporate funds to advance ideological causes, organizations, or policies (1).

Criteria:

Uses corporate political actions and/or financial contributions for ideological, non-business purposes.

Risk Level:

Lower

Rationale:

TSMC does not operate a PAC at this time and has not used its lobbying for ideological purposes (1)(2)(3).