Wed, Feb 04, 2009 - Page 12 News List

TSMC rebuts report of capital reduction

By Lisa Wang  /  STAFF REPORTER

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said yesterday it had no plans for a capital reduction.

“A capital reduction is a one-off cash distribution to shareholders, which is not TSMC’s fundamental objective,” TSMC said in a statement, dismissing a report by the Chinese-language Economic Daily.

The report said that TSMC was evaluating the possibility of raising its cash dividends through a capital reduction and that it could propose the idea at a board meeting scheduled for next Tuesday.

However, TSMC said that its company objective was to generate value for its shareholders through increases in the company’s share price and distribution of cash dividends.

In addition, a trading suspension on the company’s shares during the capital reduction process would have a negative impact on the market and shareholders, it said.

TSMC said it would maintain the policy of sustainable cash dividends it has used in recent years.

On Jan. 22, the chipmaker told investors it would distribute a NT$3 cash dividend per common share this year based on its earnings of NT$3.83 a share last year.

Shares of TSMC rose 2.51 percent to NT$42.85 yesterday, slightly underperforming the benchmark TAIEX index, which gained 2.65 percent.

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