TSMC Global, the overseas unit of Taiwan Semiconductor Manufacturing Co., has announced plans to issue $10 billion in new stock to manage forex risks associated with fluctuations in the Taiwan dollar.
Announcement of TSMC Global’s Stock Issuance
TSMC Global has announced its intention to issue new stock amounting to $10 billion. This decision is made to increase capital for managing exchange-rate risks. This is the third such issuance since 2024 and is the largest to date.
Impact of Strengthened Taiwan Dollar
The Taiwan dollar has recently strengthened, raising concerns in Taipei about the economy’s reliance on exports. In the last month, it recorded its largest single-day gain since the 1980s, prompting the central bank to seek ways to curb speculative trading.
Outlook and Impact on TSMC Business
TSMC's CEO, C. C. Wei, noted that the company's operating margins have fallen by several percentage points due to the stronger local currency. Meanwhile, in April, the company provided a positive forecast for the year based on demand for AI chips. However, when asked about rumors of building factories in the UAE, Wei denied them.
In conclusion, TSMC Global is taking steps to manage forex risks through the issuance of new stock, highlighting the current economic challenges posed by the strengthening of the Taiwan dollar.
