TAIPEI — Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest foundry, said it is open to the possibility of selling a stake in itself to Chinese investors.
TSMC Chairman Morris Chang said he would consider the possibility “if the price is right and it is beneficial to shareholders”. He made the comment at TSMC’s annual sports day event on Nov. 7.
Chang’s comment comes as Chinese investors such as Tsinghua Unigroup show an increased interest in taking stakes in Taiwanese chipmakers. Tsinghua last month bought a 25 percent stake in Taiwan chip packager Powertech, and it also expressed an interest in buying shares in MediaTek, Taiwan’s largest chip designer.
China and Taiwan have been political rivals since 1949, when an army led by the Communist Party overthrew China’s ruling Nationalist Party, which fled to Taiwan in defeat. Relations are improving as the leaders of China and Taiwan met in Singapore on Nov. 7, the first such meeting in more than 60 years.
China, which imports more than 90 percent of the semiconductors it uses to assemble mobile devices such as Apple’s iPhone, last year started offering incentives to boost the development of its still paltry domestic chip industry.
Taiwan, which makes about a fifth of the world’s semiconductors, restricts Chinese investments in its electronics businesses on concerns it will lose jobs and key technology. The Taiwan government doesn’t allow Chinese investors to buy controlling stakes in Taiwanese chipmakers and no Chinese investments are allowed in local chip design companies such as MediaTek.
TSMC Chairman Chang said that if a company wanted to take a 25 percent stake in TSMC, it would come at a hefty price, costing at least $30 billion. TSMC, with a total market capitalization of $112 billion, has shares listed on the Taiwan bourse and the New York Stock Exchange and is a core holding for global fund managers investing in the technology industry.
After Tsinghua said it is interested in taking a stake in MediaTek, Taiwan financial regulators responded by saying they are reviewing rules on investment by Chinese companies.
At last week’s sports event, TSMC’s Chang said “there is no reason to ban investments coming from China”.
Taiwan has eased rules on domestic chipmakers investing in China. The island’s Ministry of Economic Affairs in September said it would allow Taiwanese companies to invest as sole owners in a maximum of three 12-inch wafer fabs in China. Previous rules limited local chipmakers to investing as joint-venture partners or as sole investors in fabs with lagging-edge process technology.
TSMC negotiated with the Taiwan government earlier this year to ease the restrictions. The company, which currently has one 8-inch fab operating in China, last month said it is still evaluating the possibility of investing in a new 12-inch fab in the world’s most populous nation.
TSMC said it wants sole ownership of any fab operations it sets up in China for the sake of protecting its intellectual property and trade secrets.