March 9, 2007 – Royal Philips Electronics NV, Europe’s largest consumer electronics maker, revealed today that it plans to sell its 16.2% stake in Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) over the next few years. The stake is currently valued at around US$8.5 billion.
The plan involves Philips selling $1.75 billion in shares on the Taiwan Stock Exchange and another $2.5 billion worth of depository shares on the New York Stock Exchange while TSMC repurchases an additional $1.5 billion of its shares from Philips. All of these transactions are planned for this year.
TSMC will either repurchase Philips’ remaining shares by 2010 or Phillips would consider selling them to institutional investors, the companies said in a joint statement.
Philips shares rose 0.5% to €28.12 ($36.94) in Amsterdam.
The divestment plan follows Philips’ sale of an 80.1% stake in NXP Semiconductors BV, its own former semiconductor division, to a group of private equity investors led by Kohlberg Kravis Roberts & Co. for $5.58 billion last August.
TSMC is the largest contract chipmaker in the world by revenue. Its chips are used in products such as mobile phones, digital cameras, and computers. The chipmaker’s customers include several major players in the global high-tech sector.
In January, TSMC reported earning a record NTD127.01 billion ($3.86 billion) in 2006, up 35.7% from NTD93.58 billion a year earlier. Revenue rose 19.1% to NTD317.4 billion ($9.66 billion) from NTD266.56 billion in 2005.