Taiwan Government Rumored to Be Planning Sell-off
of TSMC Shares
A domestic political spat in Taiwan has brought to light
the Taiwan government's investment in TSMC (Taiwan Semiconductor
Manufacturing Co.), the world's largest chip foundry,
which makes chips for many of the world's largest companies.
TSMC, as reported
earlier, is actively seeking approval from the Taiwan
government to start manufacturing in China. But, the main
problem, is that the Taiwan government is a significant
shareholder in TSMC, and the Taiwan and China governments
are hostile to each other because of their conflicting
claims to Taiwan.
Since its founding in 1987, TSMC has enjoyed government
backing, mainly because it is the largest leaseholder
in the Hsinchu Science-based Industrial Park. But, as
China's IT technology infrastructure has taken off, the
Taiwan government's share in TSMC has become an impediment
to expansion into China.
In Taiwan's legislative yuan, Taiwan's chief legislative
body, legislator Li Tonghao has accused Taiwan's government
of planning to sell off 641 million shares of TSMC stock,
with each share valued at NT$71.52, or US$2.10 per share.
The Taiwan government is under serious budget pressure,
and may be considering a sell-off to meet its budgetary
commitments for 2004. Li said that Taiwan may also be
considering sales in other Taiwan companies in order to
meet its budget.
For TSMC, a government sell-off may be a blessing in
disguise, as it will be freer to pursue a more aggressive
policy in China. Taiwan will have its presidential elections
in March 2004.
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