Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said yesterday that TSMC Global Ltd, its financial investment arm, has decided to increase its capital, in an effort to cut foreign exchange hedging costs as the New Taiwan dollar appreciates against the US dollar.
TSMC said a board meeting of TSMC Global, registered in the British Virgin Islands to manage the chipmaker’s financial investments, approved a plan earlier in the day to make a rights issue to increase its capital by US$10 billion and lower foreign exchange hedging costs.
The meeting was held after TSMC’s board of directors agreed in February to inject up to US$10 billion into TSMC Global.
Photo: Ann Wang, Reuters
Taiwanese exporters have come under pressure as the NT dollar rapidly appreciated against the greenback recently. A stronger local currency is expected to lead to foreign exchange losses, which will erode the profitability of Taiwanese exporters.
So far this year, the NT dollar has risen against the US dollar by more than 11.5 percent.
Last month alone, the local currency soared NT$2.088, or nearly 7 percent, against the US dollar amid market speculation that the US had pressured Taiwan to allow currency appreciation as part of ongoing trade and tariff negotiations between the two sides. However, the central bank denied it came under pressure from Washington.
This month, the appreciation of the NT dollar has continued, initially amid escalating tensions in the Middle East.
Yesterday, the local currency appreciated 0.49 percent to close at NT$29.391 against the greenback, its strongest in more than three years, as the US Federal Reserve signaled a dovish tone on monetary policy, despite hopes that a ceasefire between Israel and Iran will hold.
TSMC chairman C.C. Wei (魏哲家) said at an annual general meeting earlier this month that every 1 percent appreciation in the local currency reduces the company’s operating margin by 0.4 percentage points.
The impact resulting from a higher NT dollar has been large, Wei admitted, but added that TSMC will work to maintain its lead over its peers in technology development and sell products at reasonable prices.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
STABLE DEMAND: Delta supplies US clients in the aerospace, defense and machinery segments, and expects second-half sales to be similar to the first half Delta Electronics Inc (台達電) expects its US automation business to remain steady in the second half, with no signs of weakening client demand. With demand from US clients remaining solid, its performance in the second half is expected to be similar to that of the first half, Andy Liu (劉佳容), general manager of the company’s industrial automation business group, said on the sidelines of the Taiwan Automation Intelligence and Robot Show in Taipei on Wednesday. The company earlier reported that revenue from its automation business grew 7 percent year-on-year to NT$27.22 billion (US$889.98 million) in the first half, accounting for 11 percent
A German company is putting used electric vehicle batteries to new use by stacking them into fridge-size units that homes and businesses can use to store their excess solar and wind energy. This week, the company Voltfang — which means “catching volts” — opened its first industrial site in Aachen, Germany, near the Belgian and Dutch borders. With about 100 staff, Voltfang says it is the biggest facility of its kind in Europe in the budding sector of refurbishing lithium-ion batteries. Its CEO David Oudsandji hopes it would help Europe’s biggest economy ween itself off fossil fuels and increasingly rely on climate-friendly renewables. While
RSS