Philips ssells shares in TSMC to raise cash

Philips ssells shares in TSMC to raise cash
David Manners Philips has raised over $500m by selling 2.5 per cent of its stake in the Taiwan Semiconductor Manufacturing Company (TSMC) at an auction in Taipei last week which put a valuation on TSMC of $20bn. Philips founded TSMC in 1986 as a joint venture between the company and the Taiwan government. The government and Philips put shares on the market in 1994 when TSMC was floated on the Taipei Stock Exchange. At that time Philips sold 6.42 per cent of its 40 per cent stake in TSMC reducing its holding to 33.58 per cent. Philips contributed its two micron CMOS process technology to the venture to get it started as the world’s first pure-play silicon foundry – that is a semiconductor company without products of its own which exclusively makes the IC designs of other companies. After selling 100m shares, Philips’ holding in TSMC is reduced from 33.58 per cent to 31.13 per cent worth, on last week’s valuation of $5.25 a share, over $6bn. This year TSMC is expected to make a net profit of over $500m. Last year it had revenues of $1.4bn. Growing to a capital value of $20bn and sales of $1.4bn in only ten years, makes TSMC one of the most successful semiconductor start-ups of all time. It took Intel fifteen years to reach the $1bn sales mark. TSMC has consistently had gross margins of 40 per cent plus. Earlier this year TSMC announced a $14.5bn investment programme to build six new fabs at a newly-established science park at Tainan in the south of Taiwan.


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