TSMC’s Huang Says Key to Managing FX Risk Is Keep It Simple

When you’re a dominant company in a small economy with huge overseas earnings, the best way to manage your exposure to the vagaries of the currency market is to keep it simple, according to Taiwan Semiconductor Manufacturing Co.’s Wendell Huang.

The risks are far from small. TSMC’s gross margin and operating margin will be affected by 30 basis points nowadays for every percent change in the exchange rate between the US dollar and the Taiwanese currency, the chief financial officer said. The company also has to be mindful of the impact that its trading can have on the broader market, he said.