Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) board of directors yesterday approved a plan to sell a 5 percent share in Vanguard International Semiconductor Corp (世界先進) for NT$3.49 billion (US$116 million).
The world’s biggest contract chipmaker said in a statement that it plans to sell 82 million common shares of Vanguard at NT$42.55 per share. That represents a 5 percent discount from Vanguard’s closing price in Taipei of NT$44.8 yesterday.
However, it did not say when it would start the sale.
The company said it would still be the biggest stakeholder of Vanguard, a supplier of driver ICs used in flat panels, with a 33.3 percent stake following the sale.
It also said the share sale would not affect its strategic alliance with Vanguard, as the two firms remain committed to technology collaboration and wafer supply deals.
On Thursday, TSMC posted consolidated sales of NT$148.22 billion in the first quarter, up 1.65 percent from the previous quarter and beating its earlier guidance of NT$147 billion.
Daiwa Securities said that with the popularity of mobile devices on the rise, demand for chips using TSMC’s advanced 28 nanometer process is expected to rise this quarter.
An increase in average selling price, helped by the company’s first-quarter launch of production using the more sophisticated 20nm process, should also contribute to a 15 percent quarter-on-quarter sales increase in the current quarter, the brokerage’s analysts said.
TSMC is scheduled to hold an investors’ conference on Thursday to present its first-quarter results and give guidance for the second quarter.
Daiwa Securities said TSMC is expected to churn out the A8 processor for Apple Inc beginning in June, and it could supply 50,000 of the wafers used to manufacture the processor by the end of the year, which would boost its bottom line.
Citigroup Global Markets was as upbeat as Daiwa Securities, also predicting a 15 percent sequential increase in sales for the second quarter as TSMC clients build up inventories to meet rising demand from 4G telecom services.
Barclays Capital expects TSMC’s second-quarter sales to rise 14 percent to 18 percent from the first quarter on solid demand from major clients, such as Apple, Qualcomm Inc and MediaTek Inc (聯發科).
TSMC shares closed up 0.42 percent at NT$120 yesterday in Taipei trading.
Citigroup has raised its target price on TSMC shares to NT$137 from NT$133, while Barclays has raised its target price to NT$160 from NT$139.