Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was on Thursday set to sell local currency bonds, as it prepared for a spending blitz amid a global chip shortage.
The world’s largest contract chipmaker planned to price about NT$16 billion (US$565.25 million) of notes in three parts in an auction, though the actual issuance size might change.
The manufacturer would have to contend with a recent rise in rates globally that has sent many corporate bond yields up from record lows in the past few weeks.
Photo: Sam Yeh, AFP
The debt offering comes at a promising time for the semiconductor industry as the world scrambles its way through the shortfall for the key components in everything from smartphones to TVs and vehicles.
US President Joe Biden’s administration has pressed Taiwan, home to the largest semiconductor manufacturing sector in the world, to help resolve a shortfall of auto chips that has idled some auto plants.
TSMC last month announced that its outlay for capital expenditure this year could total as much as US$28 billion, up from US$17 billion last year.
The staggering sum would help expand its technological lead and fund construction of a planned US$12 billion fab in Arizona.
The company’s board approved a plan this month to raise up to NT$120 billion of unsecured corporate bonds in Taiwan, as well as the provision of a guarantee to a unit for dollar note issuance of up to US$4.5 billion.
“TSMC needs funds to build its US factory,” and it might decide later in the year to increase its debt issuance plans, Capital Securities Corp (群益金鼎證券) trader Baker Tu (涂瑞勝) said.
Concerns about extra future bond supply from the company could dampen demand for Thursday’s offering, he said.
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