TSMC issues $1.2 billion of bonds

Taiwan Semiconductor has announced that it will be raising funds through issuing bonds to weather tough economic times.

The world’s largest contract chip manufacturer will issue $1.2 billion in unsecured common corporate bonds, according to the firm’s board of directors. The board indicated that the issuing of straight corporate bonds aims to ensure “long-term, low fixed cost funding”.

According to some reports it is the first time in nine years that the company has issued unsecured bonds, and it is hoped that this will give the company more room for maneuver with regards to its funds.

This has lead to suggestions that TSMC will use funds generated to finance a larger move into renewable energy, analysts have pointed out to FocusTaiwan.

The analyst predicted that TSMC will “announce the acquisition of assets in the renewable energy sector and to finance through the bond sale”.  This could mean the expansion of the LED lighting and solar energy arms of the business. 

The market for solar panel may have been going through a bit of rough time lately, but with expectations that it could pick up towards the end of the year the move could offer an alternative for TSMC to increase revenues.

The LED lighting market is also another area which is likely to continue to grow as the technology becomes cheaper and more commonplace.

And with the semiconductor market not in great shape at the moment it would not be a surprise that it would seek to move into other areas.

The announcement came as TSMC posted annual its first annual sales decline in 22 months during July, with the chip industry hit by, among other factors, global economic instabilities.

It is the fourth consecutive decline in sales on a monthly basis, a similar situation to that of rival United Microelectronics Corp, says Reuters.

TSMC’s sales in July dropped 3.4 percent as compared to the previous year, while UMC saw a more substantial 18.6 percent drop.

TSMC boss Morris Chang has now lowered expected growth of the semi industry from seven percent to four percent, excluding the memory segment, with the foundry industry growth down to seven percent from 15.