TSMC announced its acquisition of Worldwide Semiconductor Manufacturing Corp. (WSMC) in January 2000 to expand capacity as demand for outsourced chip manufacturing rose. The announced deal was a two-for-one TSMC share swap; the contemporaneous report did not disclose its valuation. WSMC brought eight-inch wafer fabs and 0.25- and 0.18-micron process technology.
Why did TSMC buy WSMC?
TSMC said the acquisition would help it respond to strong, sustained worldwide demand for integrated-circuit foundry capacity. Chairman Morris Chang described the strategy as a combination of TSMC’s own expansion programs and selected cooperation opportunities with companies that shared its values. EE Times reported the announcement on January 7, 2000.
The deal was expected to increase TSMC’s annual output from 2.8 million eight-inch wafers in 2000 to about 3.4 million in 2001, according to the contemporaneous account. That was a forecast, not a reported audited result.
What did WSMC add?
WSMC operated an eight-inch wafer fab with 0.25- and 0.18-micron process technologies. A second eight-inch fab was expected to open in March 2000. WSMC projected combined output of about 400,000 wafers by the end of 2000 and approximately 760,000 in 2001. Those figures were WSMC projections cited at the time, not confirmed post-acquisition production.
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What were the deal terms and timing?
The announced transaction was structured as a two-for-one TSMC share swap. The January 2000 report said the valuation was undisclosed and that TSMC expected to complete the acquisition by the end of June 2000. The announcement and expected completion date do not establish the definitive legal closing date.
A later TSMC company-history reference commonly places the value at approximately $550 million in TSMC stock. That historical estimate is distinct from the contemporaneous report’s statement that the transaction valuation had not been disclosed.
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How to interpret the capacity figures
The figures describe different scopes: TSMC’s projected company-wide annual output rose from 2.8 million wafers in 2000 to about 3.4 million in 2001, while WSMC separately projected combined output from its fabs of about 400,000 wafers by the end of 2000 and approximately 760,000 in 2001. They should not be added together as independently verified production totals. The available accounts establish the capacity rationale and projections, but not audited realized output after the acquisition.
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