Hsinchu, Taiwan-based semiconductor foundry Taiwan Semiconductor Manufacturing Co. (TSMC) reported today that its board of directors approved a share buyback plan to repurchase up to $1.5 billion (48.5 billion New Taiwanese dollars) or no more than 800 million of the company’s common shares from the open market.

TSMC plans to buy back shares at a price in the range of $1.34 to $2.91 (43.2 to 94.2 NT) per share between November 14 and January 13, 2008, with the repurchased shares to be cancelled.

In March, TSMC and Philips detailed a multi-phased plan for Philips’ exit from its current shareholding in TSMC as part of its extraction from the semiconductor realm.

The companies have completed the first two phases of the plan, with Philips selling approximately $1.75 billion in shares to long-term investors in Taiwan in March, and another $2.56 billion in TSMC ordinary shares in the form of American Depositary Shares in May.

TSMC VP Lora Ho explained that the buyback is the third phase of the multi-phase Philips plan and is open to all shareholders. Philips, which currently holds an 8 percent stake in TSMC, intends to sell up to $1.5 billion of its shareholding in TSMC in the open market during this period, Ho noted.

The fourth phase of the plan remains unchanged whereby TSMC intends to conduct additional share repurchase programs over the next three years, subject to at least maintaining its current annual cash dividend per share, and cancel the repurchased shares.

Philips intends to continue participating in these share repurchase programs and will also consider other sales to long-term financial investors mutually agreeable to both companies, TSMC said.

“Other than as part of the agreed multi-phased plan, Philips does not intend to sell TSMC shares in the open market,” said Ho added in a statement.

By: DocMemory
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