TSMC plans to increase its stake in Vanguard International Semiconductor to 37.8%, according to a company announcement.

TSMC announced on August 24 that the company's board of directors approved a proposal to purchase no more than 11% of VIS shares via block trade, at a price not exceeding NT$5.55 billion (US$168.3 million), representing no more than NT$29.70 per share. TSMC currently owns approximately a 26.8% stake in VIS.

TSMC chief financial officer (CFO) and spokesperson Lora Ho said the planned transaction will strengthen TSMC's business alliance with VIS and is part of TSMC's 8-inch wafer strategy. She added in saying that future purchase of VIS shares, if any, will depend on the share price of VIS and the environment of the semiconductor industry.

Goldman Sachs commented that TSMC holds influential power at VIS' management and benefits from the available 8-inch capacity of VIS and suggested this further share purchase was TSMC's attempt to prevent the risk of someone else taking the 11% share of company stock to be released by the Taiwan National Development Fund (NDF). The NDF is said will release its 11% stake in VIS in 2007.

By: DocMemory
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