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TSMC investigates supplier corruption claims

Engineer fired, others in testing department under scrutiny

Taiwan Semiconductor Manufacturing Co. said it had fired an engineer for allegedly accepting more than $30,000 in bribes.

TAIPEI -- Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, said on Wednesday it had fired an engineer for allegedly accepting more than $30,000 in bribes and that it was looking into other corruption claims.

"We received a report last June alleging that our staff in the testing department received an inappropriate consulting fee and an engineer in the department admitted his wrongdoing," said TSMC spokeswoman Elizabeth Sun.

Sun said that the engineer received 10,000 New Taiwan dollars ($310) a month in improper payments, which eventually totaled more than NT$1 million, from a supplier and that the employee was dismissed in November. She said the engineer did not have any power to make decisions on order placements.

The company did not notify police, she said, as it believed the payments may not have breached the law but had warned the unnamed supplier against repeating its action.

"Later last year, we got another report alleging the same department took other bribes but we are still looking into the case," Sun said. November's anonymous tip alleged that staff received some NT$1 billion in improper payments. So far the company has decided many allegations in the complaint are false. An industry source told Nikkei Asian Review that suppliers from Japan, South Korea, and the U.S., have been implicated in TSMC's investigation.

TSMC's announcement came hours after a Taiwanese magazine reported on some of the allegations. Citing unnamed employees of some of the chipmaker's would-be suppliers, the weekly Mirror magazine said that three employees in TSMC's testing department had allegedly demanded and accepted some NT$1 billion in "consulting fees" as the price of securing orders.

The scandal comes at an eventful moment for TSMC. Last month, the company was forced to disclose a $16 billion investment plan to build the world's most advanced chip facility in southern Taiwan after a government official leaked the information to local reporters.

Not long afterward, Chiang Shang-yi, a former co-chief operating officer took an offer to be an independent board member at Chinese rival Semiconductor Manufacturing International. Beijing has been working aggressively to poach Taiwanese talents and build its own semiconductor sector to reduce reliance on foreign chip companies.

Taiwan has the world's no.2 biggest chip industry, only after the U.S.

Shares of TSMC closed unchanged at NT$183 on Wednesday.

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