TSMC to issue NT$15.6 billion in bonds to fund production expansion

Taipei,  Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, approved a plan Tuesday to issue NT$15.6 billion (US$530 million) in unsecured bonds to help fund its plans to expand production capacity.

In a public notice, TSMC said the bonds will comprise three tranches — NT$4.8 billion payable over five years, NT$8 billion over seven years and NT$2.8 billion over 10 years.

The interest rates will be 0.5 percent on the five-year bonds, 0.58 percent on the seven-year ones and 0.6 percent on the 10-year tranche, TSMC said.

The company did not disclose when and where the bonds will be sold but said the funds will be used to finance capacity expansion.

The latest announcement marks the fourth time this year that the TSCM has issued unsecured bonds in Taiwan, with the total amount reaching NT$73.9 billion, as the chipmaker continues to boost production and develop advanced processes.

According to market analysts, the funds from TSMC bond sales in the second half of the year will also be invested in its 5 nanometer chip production, the most advanced technology the company currently has in mass production.

Currently, TSMC is working on 3nm chips, which are expected to start commercial production in Tainan in 2022, and also on the even more advanced 2nm process.

Due to strong demand for 5G applications and high-performance computing devices, TSMC said in mid-July that it would increase its capital expenditure budget by US$1 billion, to range between US$16 billion and US$17 billion, for 2020.


Source: Focus Taiwan News Channel

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