TSMC shares gain as Philips places part of its stake

Shares in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest made-to-order chip maker, rose after local investors, including Cathay Life Insurance Co (國泰人壽), bought a NT$57.7 billion (US$1.7 billion) stake from the chipmaker's biggest shareholder.

TSMC's shares gained 2.8 percent to close at NT$69.1 on the Taiwan Stock Exchange. The benchmark TAIEX index rose 54.85 points, or 0.72 percent, to 7,684.00 on turnover of NT$104.97 billion.

Royal Philips Electronics NV, based in Amsterdam, sold a 3.4 percent stake, or 887 million shares, in the chipmaker through a placement after the end of trading on Monday. The sale is part of Philips' plan to sell its entire holding in TSMC by 2010. The NT$65 sale price was a 3.3 percent discount to Monday's closing price.

The sale reduces Philips' stake in TSMC to 12.8 percent from 16.2 percent, the Dutch company said in a statement.

Cathay Life was among the purchasers of the shares, spokesman of parent Cathay Financial Holding Co (國泰金控), Lee Chang-ken (李長庚), said in a telephone interview. He declined to provide details of the purchase.

The share purchase is not expected to affect Cathay Life's credit ratings, Taiwan Ratings Corp (中華信評) said yesterday.

"The higher concentration risk appears manageable. Moreover, Cathay Life's capitalization remains at a level commensurate with the ratings," the statement read.

Fubon Life Assurance Co (富邦人壽) was another of the buyers of the stake, Economic Daily News reported, without citing sources.