TSMC share sale is suspended

The Cabinet yesterday said it will suspend a proposed sale of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares scheduled for later this year, in order to help maintain stability for both TSMC share prices and the benchmark TAIEX.

"[TSMC Chairman Morris Chang (張忠謀)] told me that it is not good timing for the sale," Premier Yu Shyi-kun said after he met with Chang yesterday morning.

"The proposed share sale may hurt TSMC's share prices and harm investor confidence in the stock market," he added.

Yu met with Chang yesterday at a breakfast meeting held by the Chinese National Association of Industry and Commerce in Taipei.

Shares of TSMC lost NT$1.9 to close at NT$40.9 yesterday on the TAIEX. Since the beginning of the month, TSMC shares have tumbled 11 percent on fears of a slowdown in global electronics demand and growing inventories, despite the company's solid financial reports.

According to a budget plan proposed by the management committee of the Development Fund (開發基金) in last December, the fund plans to sell 670 million TSMC shares at NT$71.898 per share this year to alleviate the nation's budget deficits. The government's budget proposal for this year will leave a deficit -- the gap between spending and revenue -- of NT$257.4 billion, widening 13 percent year-on-year.

The Development Fund, which owns a 7.4 percent stake in the world's largest made-to-order chipmaker, said the planned sale is estimated to bring in NT$40 billion for the national coffer. After the sale, the fund's holdings in TSMC will drop to 4.6 percent, or 900 million shares.

Hu Sheng-cheng (胡勝正), chairman of the Council for Economic Planning and Development who also attended the meeting, said the Cabinet will accept Chang's suggestion and look for the proper time to carry out the sale.

However, other companies that the fund holds shares with are not as lucky as TSMC. According to the fund's budget for this year, the fund will sell 48 million shares in Powerchip Semiconductor Corp (力晶半導體) at NT$21.8 per share, 80 million shares in China Bills Finance Corp (中華票券) at NT$9.65 each, and 70 million shares in Vanguard International Semiconductor Corp (世界先進) at NT$7.

Hu said that the Cabinet will sell shares of these companies in accordance with the budget project. Hu added that the Cabinet will soon hold meetings to discuss how to fill the NT$40 billion budget shortfall since the fund has decided to halt the sale of TSMC shares.

For the first half of the year, TSMC reported sales revenue of NT$122.38 billion, up by 37.1 percent from the same period last year.