Steve, you are incorrect sir. NSM will keep a minority stake.Fab sale news:
NEW YORK. 10:15AM EDT—Taiwanese semiconductor maker Taiwan Semiconductor Manufacturing Co. (nasdaq: TSMC) confirmed yesterday that it would buy National Semiconductor's (nyse: NSM) South Portland, Me. fabrication unit, a week after Forbes.com reported the two companies were in talks.
TSMC confirmed the talks between TSMC and National in a story published in Eurotrade, a computer trade magazine. The talks do not rule out other buyers, however. International Business Machines (nyse: IBM) and other companies from Taiwan are being linked as possible buyers.
Buying the factory makes perfect sense for a company like IBM. In an earnings conference call on April 21, IBM indicated that its custom ASIC chip business was so strong that it is struggling to meet demand. Industry sources say that IBM chip factories are working pretty close to capacity. The recent design win at Nintendo would put even more pressure on IBM production lines and Big Blue might be looking to add quick capacity.
TSMC, on the other hand, has its own capacity problems. Its main Taiwanese rival United Microelectronics Corp. estimates that its chip output in 2000 will exceed that of TSMC, which at present it the world's largest pure chip manufacturer. United Microelectronics has been aggressively developing its foundry business since a restructuring in 1995. The two chip foundries are likely beneficiaries as the semiconductor industry comes out of a three-year slump.
On May 5, National announced that it would exit the PC processor business in order to sharpen the company's focus on the emerging information appliance market and on its traditional analog business. In a related action, National said it intends to sell a majority interest in its South Portland, Me. wafer fabrication plant. The news was announced two weeks after it was reported on Forbes.com. |
