Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, will soon start the application process to acquire an 8 percent stake in China-based Semiconductor Manufacturing International Corp (SMIC, 中芯) as part of a legal settlement, officials said on Saturday.
TSMC consulted the Investment Commission and the Industrial Development Bureau on Friday about the procedures, the officials said.
They said TSMC’s application was expected to be approved.
SMIC said in November that it had agreed to pay TSMC US$200 million in cash and issue new shares — representing approximately 8 percent of SMIC’s shares — and a warrant to settle a long-running legal dispute related to TSMC’s trade secrets.
If TSMC exercises the warrant within three years to acquire another 2 percent of SMIC shares at HK$1.30 (US$0.17) per share, TSMC’s stake in SMIC will increase to 10 percent.
Taiwanese chipmakers were not allowed to buy into Chinese semiconductor companies before new regulations took effect on Feb. 26.
The new regulations now provide a legal basis for TSMC’s acquisition of a 10 percent stake in SMIC.
Under the new laws, Taiwanese companies will be allowed to acquire a full or partial stake in Chinese chipmakers whose foundries are at least two generations behind the investing company’s most advanced factory in Taiwan.
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