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TSMC proposes to issue NT$8 in cash dividend on 2017 earnings

2018/02/14 14:04:47

Taipei, Feb. 14 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, has proposed to issue a cash dividend of NT$8 (US$0.27) per share on its 2017 earnings, in line with market expectations.

TSMC's board of directors voted to approve the dividend proposal at a meeting Tuesday and will submit the plan to shareholders at the company's annual general meeting scheduled for June 5.

The NT$8 cash dividend proposal, which is higher than the NT$7 per share TSMC distributed on its 2016 earnings, reflects the company's record-high sales and profits in 2017 that were driven by solid demand for its high-end processes.

TSMC's consolidated sales rose 3.1 percent year-on-year in 2017 to NT$977.4 billion, and its net profit grew about 2.6 percent to NT$343.1 billion. It had earnings per share of NT$13.23, compared with NT$12.89 in 2016.

The NT$8 dividend figure had been widely anticipated by the market, and investors rushed to pick up TSMC shares on Monday, the last day of trading in Taiwan before the Lunar New Year holiday.

Several foreign brokerages even issued research notes saying that they expected TSMC to increase its cash dividend payout to NT$8 per share.

Foreign institutional investors currently own an almost 80 percent stake in TSMC.

On Monday, shares of TSMC gained 1.72 percent to close at NT$236.50, helping drive that day's 0.48 percent gains in the broader market.

Based on TSMC's closing price on Monday, its dividend yield will be about 3.38 percent, well above time deposit rates in Taiwan.

If shareholders back the dividend proposal, TSMC will distribute more than NT$207 billion in cash dividends in July.

TSMC Chairman Morris Chang (張忠謀), who will retire in June, is expected to pocket about NT$1 billion in dividends as he owns some 125 million TSMC shares, or a 0.48 percent stake.

The National Development Fund under the Executive Yuan, which is one of the largest single shareholders of TSMC, is expected to receive about NT$13.23 billion in cash dividends based on the 6.38 percent stake it owns.

At the meeting Tuesday, TSMC directors also approved a proposal to dole out NT$46.04 billion in bonuses to TSMC's 43,000 employees based on the company's 2017 earnings, which is 2.68 percent more than a year earlier.

The total amount in bonuses averages to NT$1.07 million per TSMC employee.

(By Chang Chien-chung and Frances Huang)
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