At age 30, TSMC is one of Taiwan’s economic pillars

TSMC Chairman Morris Chang participates in a media event in this undated file. On Monday, the company is scheduled to hold a series of events to celebrate, including a classical music concert, as well as a tech symposium to focus on the semiconductor industry's development over the next 10 years. (NOWnews)

TAIPEI Oct. 21 (CNA) – Celebrating its 30th anniversary this year, Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the world’s largest contract chipmaker, has come a long way and become one of the pillars of Taiwan’s economic growth, creating a lot of firsts for the country.

On Monday, the company is scheduled to hold a series of events to celebrate, including a classical music concert, as well as a tech symposium to focus on the semiconductor industry’s development over the next 10 years.

Established in February 1987, TSMC, led by Chairman Morris Chang (張忠謀), became the first business in the world to serve as a pure wafer foundry operator.

Thirty years later, the chipmaker now dominates the global semiconductor market, taking a more than 50 percent share of the contract chip production industry.

On Sept. 5, 1994, TSMC launched a listing on the Taiwan Stock Exchange. With its paid-in capital on the rise and its share price on the increase, the stock’s market capitalization repeatedly broke new record highs, exceeding rival Intel’s for the first time since March.

Before falling 0.63 percent on Friday, shares of TSMC had hit a new high a day earlier, boosting its market capitalization to a record NT$6.19 trillion (US$205 billion), the highest level among all of the companies listed on the Taiwan Stock Exchange.

TSMC’s paid-capital currently stands at NT$259.3 billion, the largest in the local equity market, and its weighting on the main board hit 19.4564 percent, far ahead of the second heavily weighted Hon Hai Precision Industry Co. (鴻海), whose weighting is 6.1316 percent.

As TSMC shares move higher, the broader market tends to follow. Since the beginning of this year, its stock has gained almost 31 percent, closing at NT$237.50 on Friday, pushing up the weighted index on the main board by 16.3 percent.

The stock was one of the most important ones to help the weighted index breach the 10,000-point mark for the first time in May in 17 years and has continued to move above that level for more than four months.

In 2016, TSMC posted a record high of NT$334.25 billion in net profit, which helped it retain the title as the most profitable company in Taiwan.

It accounted for 4 percent of Taiwan’s gross domestic product in 2016, up from 3.8 percent in 2015.

Due to its sound bottom line, TSMC paid more than NT$30 billion in corporate tax this year, which made up over 10 percent of the total corporate tax revenue received by Taiwan’s government.

Earlier this year, TSMC issued NT$181.51 billion in cash dividends for its 2016 earnings, the highest such payout in the local equity market.

As TSMC is one of the favorite stocks for foreign institutional investors, they pocketed more than NT$140 billion in cash dividends, taking about 80 percent stake in the company.

Chang has urged local investors to buy into TSMC’s stock so that they can share the chipmaker’s growing earnings, adding that if they don’t, foreign institutional investors are expected to remain the largest beneficiaries of TSMC’s achievements.

At present, TSMC employs about 47,000 employees, compared with around 100 in its initial stage in 1987.

TSMC’s presence has also created a comprehensive supply chain with 320,000 employees, another benefit for the local job market. 

By Jackson Chang and Frances Huang