TSMC’s NT$7 dividend proposal approved; highest in 21 years

Taipei--A proposal by contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) to issue NT$7 (US$0.23) in cash dividend per share for the company earnings for 2016 was approved by shareholders in TSMC's annual general meeting held Thursday.

The payout, up from NT$6 the company paid for the earnings for 2015, represents a new high in 21 years in TSMC's history after the chip maker raked in NT$12.89 in earnings per share for 2016, with a dividend payout ratio of 0.54 percent.

In the shareholder meeting, TSMC Chairman Morris Chang (???) said that the dividend policy was made after careful consideration and that his company is expected to maintain the NT$7 payout or even raise its cash dividend year by year.

The latest dividend was proposed by TSMC's board of directors after the chip maker posted a record high net profit of NT$334.25 billion in 2016, up 9 percent from a year earlier, while its consolidated sales also hit a new high of NT$947.94 billion, up 12.4 percent.

TSMC's bottom line for 2016 was boosted by solid global demand for 4G smartphones, in particular from China, and an upgrade in the gaming industry. An emerging artificial intelligence business also gave a boost to the company's profitability, market analysts said.

After a good year in 2016, Chang said he has faith in 2017 and expects that TSMC will have another good year.

TSMC is one of the most favored stocks among foreign institutional investors in Taiwan, with their stake in the chip maker hitting about 80 percent, so that most of the company's dividend payouts will go to foreign investors.

Chang said he hopes local investors will raise their holdings in TSMC to share more of the company's earnings.

Shares of TSMC gained 0.71 percent to close at NT$213.00 on the Taiwan Stock Exchange Thursday, serving as a driver to the gains posted by the broader market, where the weighted index ended up 0.15 percent at 10,225.78 points.

In recent sessions, TSMC was an anchor to either lift the broader market or stabilize the weighted index, as many investors had high hopes that Chang would give a positive assessment on the outlook for the company and even the global semiconductor market as a whole. Chang is a well-respected figure in the world's integrated circuit business.

After a more-than 10 percent increase in sales in the past few years on the back of demand for smartphones, Chang said, TSMC's revenue is expected to grow 5 percent-10 percent a year by 2020 to outperform the entire semiconductor business.

Chang said that TSMC, the world's largest pure wafer foundry operator in the world, with a more-than 50 percent market share, is taking advantage of the lead over its peers in technology development and winning trust from its clients.

In the Thursday meeting, shareholders also approved two nominations by TSMC to include Mark Liu (???) and C.C. Wei (???), both of whom are presidents and CEOs, as directors of the company.

Analysts said that having Liu and Wei on TSMC's board of directors is part of Chang's succession plans for the company.

Source: Focus Taiwan News Channel