The Taiwan Semiconductor Manufacturing Co (TSMC,
TSMC, Taiwan's biggest chipmaker, will issue 1.15 billion new shares, valued at NT$199 billion (US$6.45 billion). In an all-stock transaction, it will swap one of the new shares for every two shares in Worldwide Semiconductor.
By buying Worldwide Semiconductor, TSMC can boost capacity faster and more cheaply than by building new factories. Combined with TSMC's decision in December to buy the 70 percent of TSMC-Acer Semiconductor Manufacturing Co that it didn't already own, the purchase will increase annual production capacity of 8-inch equivalent wafers to 3.4 million next year from 2.8 million in 1999.
"The worldwide demand for integrated circuit foundry capacity has steadily and strongly increased for some time," said TSMC Chairman Morris Chang (張忠謀). "In response, TSMC is aggressively building our capacity."
Building an 8-inch fab plant from scratch costs as much as US$1.5 billion, said Rick Hsu, an analyst at Grand Cathay Securities Corp. The purchases are "the quickest way for TSMC to ramp up capacity," Hsu said.
TSMC sales almost tripled in December from the same month in 1998 to a record high. It expects strong demand this year as international companies increasingly outsource chip manufacturing to dedicated foundries such as TSMC, which can produce silicon wafers more efficiently.
TSMC shares, up 70 percent since August, fell 2.8 percent yesterday before the announcement, which came after the stock market closed. Worldwide Semiconductor isn't listed, though its shares trade in the so-called gray market between NT$60 and NT$69.
The acquisition came as a surprise to many analysts and investors, who had long been focusing on a potential merger between TSMC and rival United Microelectronics Corp (
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