TSMC approves US$31.38 billion capital budget for expansion

Taipei, May 12 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the current AI boom.

In a statement, the world's largest contract chipmaker said that a board meeting Tuesday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction.

At an investor conference held in mid-April, TSMC forecast its capital expenditure for 2026 would be at the higher end of the US$52 billion-US$56 billion range it forecast in January in response to robust demand for 5G, AI and high-performance computing (HPC) applications from clients.

TSMC said the board meeting also approved a plan for the company to spend up to US$20 billion to invest in its wholly owned subsidiary TSMC Arizona, which is in charge of financial investments.

In addition, TSMC has secured approval from the board meeting to raise its cash dividend payout to NT$7 per share on the earnings in the first quarter of this year, up from NT$6 on the earnings in the fourth quarter of last year.

The NT$7 cash dividend payout came as TSMC reported a fresh quarterly high of NT$22.08 in earnings per share in the first quarter.

Market analysts described the higher dividend payout as a move to boost a dividend yield, a ratio of annual dividend per share to share price, to make its share more attractive at a time when TSMC shares repeatedly hit a new high driven by AI optimism.

Since the beginning of April, when tech stocks around the world started bouncing back amid concerns over military conflicts in the Middle East, TSMC shares have soared more than 28 percent. On Tuesday, the stock closed at NT$2,255.00.

TSMC has scheduled an ex-dividend date for Sept. 16 and the NT$7 payout is slated for Oct. 8.

For companies in Taiwan that issue cash dividends annually, the ex-dividend date is the date on which a stock begins trading after the cash dividend to be paid out on the previous year's earnings has been deducted.

TSMC started to issue cash dividends quarterly instead of annually in 2019.

TSMC Chairman C.C. Wei (魏哲家), who has 7.45 million TSMC shares, is expected to pocket NT$52.16 million in October.

The National Development Fund under the Executive Yuan, TSMC's largest shareholder with 1.65 billion shares, is expected to receive NT$11.58 billion.