Taiwan Semiconductor to Buy Worldwide Semi

Taiwan Semiconductor Manufacturing Co. (TSMC) is set to add the capacity of the third-largest foundry in Taiwan to its existing foundry operations by merging with Worldwide Semiconductor Manufacturing Corp.

(WSMC), the companies announced today.

Foundries are chip makers that produces processors for third-party companies and TSMC is already the largest dedicated chip foundry in the world.

TSMC intends to absorb WSMC, currently valued at approximately NT$17 billion (US$553.5 million) on the Taiwan Stock Exchange. The combined company will operate under the TSMC name, TSMC said in a statement issued today. The deal is subject to regulatory and shareholder approval and is expected to be completed by June 30.

Following closely on TSMC's merger announcement with TSMC-Acer Manufacturing Corp. on Dec. 29, today's move should further bolster TSMC's chip making capacity and better allow the company to meet growing world demand for processors, according to TSMC Chairman Morris Chang in today's statement.

TSMC's total annual capacity is expected to grow from an estimated 2.8 million eight-inch wafers in 2000 to approximately 3.4 million as a result of the two mergers.

Dedicated IC (integrated circuit) foundry WSMC operates one fabrication facility for 8-inch wafers today and plans to open a second in March. Together, the two facilities are expected to have a capacity of 760,000 pieces next year.

The companies have established an exchange ratio for WSMC to TSMC shares at 2:1, TSMC said.

TSMC is in Hsinchu, Taiwan, and can be reached on the Web at http://www.tsmc.com.tw/.

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