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TSMC stock sale delayed

The Taiwan Development Fund (開發基金), a NT$100 billion (US$2.9 billion) state-controlled investor, postponed a sale of Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電) stock to overseas investors after last week's terrorist attacks in the US drove down stock prices.

The fund, which holds an 11.5 percent stake in the world's biggest made-to-order chipmaker, delayed the sale after TSMC's American depositary receipts fell 28 percent in four days of trading since the Sept. 11 attacks in the US. Yesterday, TSMC fell 5.5 percent to US$9.03.

"I don't think anyone would want to buy stocks or invest money in this uncertain environment," said Lloyd Tsai, who manages NT$2.7 billion at Invesco Taiwan Ltd (景順投信).

"There's no buying pressure, and excess selling pressure on TSMC right now," he said.

Companies around the world have canceled sales of more than $20 billion of equity and debt. Investors are waiting to see how the US will respond to the terrorist attacks on Washington and New York.

Nanya Technology Corp (南亞科技), the second-biggest computer memory chipmaker, may delay a sale of NT$8 billion of shares to fund a new chip plant. Rival Powerchip Semiconductor Corp (力晶半導體) put a share sale on hold and instead may borrow US$250 million to build a new plant.

The fund, which invests mainly in technology companies, planned to raise at least US$240 million through the sale of 20 million TSMC shares to help plug a NT$195 billion government deficit. The sale would fetch US$181 million at TSMC's current price.

"TSMC's price isn't so attractive after the terrorist attacks," said Fanny Hsiao, an associate at the Taiwan Development Fund. "We decided to withdraw the application if we couldn't reach US$12."

In June, the fund raised US$291 million selling TSMC shares in the US. Merrill Lynch & Co managed the sale. The fund hasn't decided who will manage the sale when it proceeds.

"When we decide to sell, we'll invite investment banks to propose a price, and we'll choose the bank with the highest price," Hsiao said.

The fund filed the sale application with Taiwan's Securities and Futures Commission at the beginning of September. Barits Securities Corp (倍立證券) helped file the application.

TSMC shares have fallen 38 percent in the past year, compared with a 48 percent fall in the main TWSE Index.
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