The best semiconductor investment ever?
Philips started TSMC in partnership with the Taiwan government 22 years ago (Fab 14 is pictured).
In 1986, the Taiwan authorities were floating the idea of a silicon foundry in which the world’s existing chip firms could invest in return for capacity. The offer was open to all, but only Philips took it up, writes David Manners.
It is believed that Philips made no financial investment in the project, contributing instead its process technology, chip design capability, and its fab-building and manufacturing expertise. Now TSMC is worth over NT$1.5trn, or $50bn, on the stock market.
Philips never revealed how much these were but, last year, it revealed it had received a €223m dividend representing its share of TSMC’s 2006 profits.
And, as well as share sales and dividends, Philips has had the benefit of a foundry relationship with TSMC, which has allowed Philips, Semiconductors, now NXP, to gradually scale back its expensive exposure to owning digital CMOS fabs.
What a valuable business transaction 22 years ago.