Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies chips for Apple Inc’s iPhone 6 series, yesterday said that Intel Corp’s plan to acquire TSMC’s long-term customer Altera Corp would not significantly affect the Taiwanese chipmaker’s business.
This development “will not have a significant impact on us,” TSMC chairman Morris Chang (張忠謀) said during a press briefing after the company’s annual general meeting. “As we want to be the trusted supplier of technology and capacity to the world’s logic IC industry, it does not matter weather any mergers and acquisitions occur.”
“In some cases, firms that benefit from a merger-and-acquisition deal are great suppliers of capacity and technology,” Chang said.
“Intel is such a company, but it is unlikely that Intel would be able to swiftly offer its capacity and technology to Altera,” he said amid concern that TSMC would lose orders.
Intel last week inked an agreement to acquire Altera for about US$16.7 billion and the transaction is expected to close within six to nine months.
UBS semiconductor analyst Eric Chen (陳慧明) said the deal would erode 1 percent of TSMC’s total revenue this year and would gradually increase to 2 percent next year and 3 to 4 percent in 2017, assuming Intel gets additional foundry business from Altera through the deal.
“TSMC will still be the dominant foundry source for Altera’s 0.13-micron, 0.11-micron, 90-namometer [nm], 65nm, 40nm and 20nm chips for the next three years,” Chen said in a report last week.
Intel and Altera are both clients of TSMC.
Answering a shareholder’s question about rumors of a hefty loss of orders to rivals, Chang said the rumors were definitely not true.
“Actually, we are winning [orders],” he said.
“Our [global] market share is on the rise. We seized a 54 percent share last year. Several years ago, our share was just crossing 40 percent,” Chang added.
Facing intensifying competition from rivals including Intel and Samsung Electronics Co, TSMC “will not underestimate any competitors. We will not be intimidated by any competitors, either,” Chang said.
On the company’s business prospects, Chang said market demand is little changed from what the chipmaker predicted in April.
“The company’s operations will be better in the second half, compared with the second quarter and the first half,” Chang said. “For the full year, revenue will grow by a double-digit percentage [from last year].”
TSMC made NT$762.81 billion (US$24.37 billion) in revenue last year, up 27.8 percent from NT$597.02 billion in 2013.
Shareholders approved the company’s plan to distribute NT$4.5 in cash dividends for each common share, based on last year’s net profit of NT$263.9 billion, or NT$10.18 per share.
Shareholders also elected eight board directors, with seven of them re-elected for a new term.
Former Applied Materials Inc chief executive officer Michael Splinter was elected as a new independent board director of TSMC, replacing Gregory Chow (鄒至莊).
In addition, the board approved a plan to sell 82 million common shares of Vanguard International Semiconductor Corp (世界先進), or 5 percent of Vanguard’s total paid-in capital share, for about NT$3.88 billion. Vanguard is a supplier of driver ICs for flat panels.
After the transaction, TSMC is to reduce its holding of Vanguard from 33.3 percent to 28.3 percent, remaining the biggest stakeholder of Vanguard, the company said in a statement.
TSMC said it has no plans to sell more Vanguard shares and will keep its strategic relationship with Vanguard unchanged, the statement said.
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