HSIN-CHU, Taiwan, June 8, 1999- Taiwan Semiconductor Manufacturing Company ("TSMC")(NYSE:TSM) and the Acer Group ("Acer") today announced that they have signed a letter of intent which strengthens an existing strategic alliance between the two companies. Under the terms of the letter, TSMC will purchase 30 percent of the Acer Semiconductor Manufacturing, Inc. ("ASMI") stocks from Acer. This will therefore enhance a comprehensive collaboration between TSMC and ASMI in IC manufacturing technology, capacity support, and management. After the purchase is complete, TSMC and Acer will be the two major shareholders of ASMI, which will raise the already strong alliance between TSMC and Acer to an even higher level.
Dr. Morris Chang, TSMC Chairman, said, "Not only will TSMC purchase 30 percent of ASMI shares, but we will also provide full support to transform ASMI into another leading dedicated foundry company. This agreement will help both companies establish a mutually complementary capacity support system and further strengthen the already strong alliance between TSMC and Acer."
"Under the leadership of CEO Stan Shih's, Acer has demonstrated a world class ability to manufacture and market computer products, communications products, and consumer electronics. In 1998, Acer's annual revenues exceeded NT$ 220 billion. Acer itself depends substantially on IC- related products. Furthermore, Acer Laboratories Inc. ("ALI"), an ASIC design house of Acer's, have also enjoyed a close partnership with TSMC for many years. Through this strengthened alliance, TSMC and TSMC's affiliated company, Vanguard International Semiconductor Corporation ("VIS"), will together provide the Acer Group with both foundry services and certain related IC commodities," Dr. Chang noted.
Dr. Chang characterized the expanded alliance between TSMC and Acer as a win-win partnership for both companies. "TSMC is the world's largest dedicated foundry. Acer is the world's third largest PC manufacturer, and the largest PC producer in Taiwan. With the closer partnership, TSMC can further secure its leading position in the global foundry business, while Acer can also increase its global presence and position itself for long-term success. From a broader perspective, the enhanced alliance between TSMC and Acer will bring significant contributions to increasing Taiwan's competitive advantages and influences in the global Information Technology industry," Dr. Chang explained.
Acer Group Chairman and CEO, Stan Shih states, "TSMC is not only the leader in the Taiwan semiconductor industry, but also the world's largest dedicated foundry service operation. When we were deciding on a long-term strategic partner, TSMC was clearly the best choice. TSMC can use its latest technology and foundry management expertise to lead ASMI during its transformation into a foundry service operation. The Acer Group will, however, reserve a portion of ASMI's manufacturing capacity for its own use."
Stan continues, "The Acer Group's competitive advantages lie in its brand management strength, extensive global sales and marketing network, and system implementation and IC design. After TSMC takes the lead in ASMI's management, Acer can concentrate on aggressively developing its PC, peripherals and key components business and exploring opportunities in intellectual property and digital service. Also, Acer can focus on reinforcing its IC design innovation to create new opportunities for ASMI to manufacture ICs. At the same time, we will work closely with TSMC to leverage each other's strengths, give mutual support and enhance the competitiveness of both companies. This alliance is sure to increase Taiwan's influence in the global IT industry."
Under the terms spelled out in the letter, TSMC will purchase 30% of the ASMI shares for NT$5.47 billion or at NT$9.5 pe