Hsin-Chu, Taiwan, December 2, 1998 - Taiwan Semiconductor Manufacturing Company (TSMC or the "Company")(NYSE: TSM) today announced that the Company's US joint venture, WaferTech, an IC foundry established in June 1996 in Camas, Washington, will restructure its equity composition. Partners in the joint venture include TSMC, Altera Corporation (Altera), Analog Devices, Inc. (ADI) and Integrated Silicon Solution, Inc. (ISSI). When the equity restructuring is complete, TSMC will hold a 67.56% stake in WaferTech, Altera will hold a 23 % stake, while ADI and ISSI will hold 4% and 2.67% stakes, respectively.
Currently, TSMC is WafterTech's largest shareholder, holding a 57.23 % stake. Altera and ADI each have an 18 % holding, while ISSI holds a 4 % stake. According to Mr. Y.C. Huang, TSMC Spokesman, ADI is reducing its equity position in WaferTech for its own strategic business consideration. "TSMC has strong confidence in the long-term prospect of WaferTech and the Company considers the increase in its equity ownership in WaferTech to be in TSMC's long-term interest," Mr. Huang said.
At the same time, Altera also announced its intention to increase its holding in WaferTech. All parties have reached an agreement to restructure their equity position. The transaction is expected to close in January 1999.
"We are very satisfied with WaferTech's progress to date," said Rodney Smith, President and CEO of Altera. "The foundry's quality and yields have exceeded our expectations, and the proximity of the WaferTech facility has enabled us to quickly ramp our products into volume. These benefits will be of increasing importance as we accelerate the pace of new product introductions. Although the financial results of our investment will continue to be negative in the next several quarters, we are confident that over the long term this investment will make a positive financial contribution and will be an important strategic asset. Moreover, TSMC has been Altera's principal source of wafers for several years, and we are pleased with this opportunity to further strengthen our relationship."
Jerald G. Fishman, President and CEO of ADI, said, "TSMC has been our primary source of digital CMOS fabricated wafers for many years. In conjunction with a reduction in our equity stake in WaferTech, we have entered into a separate long-term supply agreement with TSMC. Under the terms of this agreement, TSMC will be ADI's principal foundry partner. This agreement assures our ability to meet our customers' long-term requirements for products manufactured using this technology."
Jimmy Lee, Chairman and CEO of ISSI said "We are already running wafers in the new WaferTech fab and believe the level of quality and service we have enjoyed with TSMC since 1990 is being continued at WaferTech. This reduction of ownership in WaferTech allows us to strengthen the liquidity on our balance sheet, but still continues our good partnership."