Last week's news that TSMC would enter the Solar and LED markets and not as a foundry supplier, coincided with Morris Chang taking back the reins of daily management of the company and Rick Tsai moving to run the new business venture. This was taken as a demotion for Tsai and a form of retribution for his actions to cut TSMC’s workforce as the foundry struggled with record low utilization rates. Apparently, there had been worker protests over the redundancies, which had impacted TSMC’s reputation.
Tsai will now set up and potentially expand TSMC’s revenue generation into two fast-expanding markets that could eventually be a million times bigger than that of the semiconductor market in years to come.
The solar market is set to explode again in 2010 and is in many respects still in its infancy. Exciting times, and I suspect Tsai is praying to thank the gods for getting the chance to build a business in that market, let alone in the LED realm.
Of course, if he has also taken a pay cut and lost or had other benefits reduced, that would certainly take the edge off the new role. However, if successful I doubt he would have suffered financially in the long term.
If I was in his position I would see this as a promotion, not a demotion. I am also not sure that Chang wants the job of running TSMC again. It is so much tougher than when he created the company that we may well see a new appointment in the next six months or so, especially if TSMC makes a decent enough recovery from the current downturn. But the tough competitive conditions stay the same.
Tsai on the other hand is now ‘free’ to get TSMC’s growth back on stream in two dynamic markets. Which would you prefer to be doing?