TSMC to buy back stock and Gvt. to Retain Shares

Reuters reports the TSMC board has agreed to buy back a significant number of shares. Reuters writes:

TSMC (2330.TW: Quote, Profile, Research, Stock Buzz), the world's biggest contract chip maker, said on Tuesday its board has approved a plan to buy back up to T$16.5 billion ($529 million) worth of its shares from the open market.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (TSM.N: Quote, Profile, Research, Stock Buzz) plans to buy back shares at a price in the range of T$42.85 to T$86.20 per share from Aug. 13 to Oct. 12, and cancel the repurchased shares, the company said in a statement.

"The sole purpose of this buyback is to remove partially the dilution from employee profit-sharing," TSMC Chief Financial Officer Lora Ho said in the statement.

The announcement came after the Taipei stock market closed on Tuesday, when TSMC shares rose 1 percent, defying a 0.4 percent fall on the main TAIEX .

"This repurchase program is separate from the multi-phase plan with Philips, and Philips will not use this program to dispose of its remaining stake in TSMC," Ho said.

Philips Electronics NV has said it planned to accelerate the sale of its remaining stake in TSMC.

The only debate here is should I wake up my wife and tell her to buy shares as soon as the market opens? Probably not! I guess their share price will jump today. Right now its sitting at NTD61.2. We will see at 1:30pm today what effect this buy back program has on their shares. Knowing Taiwan it will push the price up. People get excited by news like this.

Reuters has also reported Taiwan's state fund will keep their TSMC shares through 2009. Reuters reports:

Taiwan's state-owned National Development Fund plans to hold its shares in chip maker TSMC next year, because it has no need to raise extra cash for state coffers, a top official said on Tuesday.

"Next year's budget has been presented to the Executive Yuan (cabinet)," James Ho, deputy executive secretary of the development fund, told Reuters.

The development fund is set to contribute T$6.4 billion ($205 million) for state coffers in 2009, compared with this year's budget of between T$11 billion and T$12 billion, he said, without elaborating on the shortfall.

Despite all this news, TSMC's share price dropped 0.37% on the New York exchange. I guess the buy back program will only include shares on the Taiwan exchange and the shares owned by the government are held in Taiwan and not New York. Watching the price on the Taiwan Stock Exchange today will be interesting.

Reuters: TSMC to buy back up to T$16.5 bln of own shares
Reuters: Taiwan state fund to hold on to TSMC stake in 09