United Microelectronics Corp (UMC, 聯電), the world’s No. 2 contract chipmaker, yesterday said it planned to sell 1.3 billion new common shares via private placement in order to form a strategic technological partnership with semiconductor firms.
The share offering comes at a time when the chipmaker is struggling to ramp up 28-nanometer (nm) chip production.
UMC expects 28nm chips to account for less than 10 percent of its revenue this year.
“The private placement is to help create an opportunity for semiconductor technology cooperation, or to form a strategic alliance with local or foreign companies,” UMC spokesman Liu Chitung (劉啟東) said in a filing to the Taiwan Stock Exchange.
The company’s board yesterday approved the sale of the 1.3 billion common shares, about 10 percent of its 12.95 billion capital shares, in the form of depositary receipts, or domestic or foreign bonds.
The board also agreed to distribute NT$0.4 per share in a cash dividend for shareholders, which amounted to a 63 percent payout ratio, as UMC reported earnings of NT$0.63 a share last year.
The dividend yield was 3.6 percent, as the company’s shares closed at NT$11.1 yesterday.
The board also approved a share buyback plan, its first in three years, and is set to distribute the repurchased shares to employees.
UMC plans to repurchase as many as 200 million shares, or about 1.54 percent of its total capital shares, from the open market at between NT$7.8 and NT$16.9 in a two-month period starting today.