Royal Philips Electronics said that it may sell off 500 million shares of Taiwan Semiconductor Manufacturing Co. Ltd. in a move to raise about $1.2 billion.

Philips emphasied that it is "considering" the offering, which when converted equates to 100 million ADSs at a Tuesday closing price of $11.76, the company said.

If such an offering is made, the Netherlands-based company plans to use the proceeds to reduce its net debt and for general corporate purposes.

If the move does go through, Philips will see its 21.5 percent share of TSMC drop to about 19.1 percent.

“While we’ll remain among the largest shareholders in TSMC for the foreseeable future, we believe that in the long-term our shareholders would benefit most from a gradual and orderly reduction in this holding," Jan Hommen, vice chairman and CFO of Philips, said in a statement. "We don’t expect this offering will affect the strategic relation between the two companies.”

TSMC added that this will not distrube its partnership with Philips, which include a joint development agreement in Crolles, France, and a manufacturing joint venture in Singapore, known as SSMC.

“We have seen a steadfast partnership between Philips and TSMC along the way, and will see it go forward in the long run,” Lora Ho, TSMC VP and CFO, said in a statement.