Wafer foundry leader TSMC announced on the 3rd that it has disposed of 9.43 million shares of SMIC held by the company, and the disposition benefits will be transferred to a retained surplus of approximately HK$31 million, equivalent to NT$124.4 million, which is not accounted for according to accounting standards. Into profit and loss items.

TSMC announced that it has handled about 9.43 million shares of SMIC held from May 31 to June 3 this year, at an average price of 9.28 Hong Kong dollars per share, with a total transaction amount of approximately 87.6 million. In Hong Kong dollars, the disposition of benefits will be transferred to a retained surplus of approximately HK$31 million.

TSMC Disposes of SMIC's shareholdings is mainly for the disposal of financial assets measured at fair value through other comprehensive gains and losses. After the completion of the punishment, TSMC still holds about 11.66 million shares of SMIC, accounting for about 0.2% of SMIC's equity. TSMC has expressed it many times and will choose SMIC's shareholding in the hands of the appropriate time point, and will eventually complete the full shareholding.

SMIC announced that it will voluntarily withdraw from the New York Stock Exchange and retreat to the OTC market. Although SMIC remains in the OTC market, it cannot be said that it has delisted from the US stock market. However, the trading volume in the OTC market is very limited. The future trading will focus on H shares in Hong Kong, which is actually equivalent to canceling the second listing in the US. After SMIC announced its withdrawal from the US stock market, Hong Kong H-share stocks rose in response, and TSMC sold the SMIC shares in its hands.

The industry believes that SMIC's delisting from the New York Stock Exchange mainly considers that the transaction volume is too low, and the cost of maintaining the listing in the US is too high, and the relationship with the US-China trade war may not be great. SMIC may apply for listing in Shanghai A-shares, and exiting the US stock market may also be reduced by the US authorities.

Further reading: TSMC and SMIC

According to the data, in 2003, SMIC's wafer sales surged from US$50 million to US$360 million, and it jumped to the fourth largest chip supplier in the world. Behind this achievement is TSMC’s three indictments against them for eight months. The most serious one was that on August 18, 2003, TSMC, TSMC North America and its wholly-owned subsidiary Wafertech in the United States filed a request with the US International Trade Commission (ITC) under the US 1930 Tariff Act. The investigation procedure specified in Section 337 of the Law (hereinafter referred to as Section 337) alleges that the import and sale of semiconductor devices and related products from three Chinese companies and one US company owned by SMIC infringed its patents.

The lawsuit lasted for a long time. Until 2009, SMIC announced that it would sign a settlement agreement with TSMC, and will pay TSMC $200 million in cash for four years. At the same time, it will issue new shares and grant warrants to TSMC. The transaction will be held in the background. 10% of SMIC.

According to the settlement agreement, both parties will lift all allegations that have or may have been appealed to pending litigation; terminate SMIC's remaining payment of approximately US$40 million under the previous settlement agreement; SMIC pays NT$200 million to TSMC The settlement agreement will be paid 15 million US dollars in cash, the remainder will be paid in installments within four years, 15 million US dollars before December 31, 2009, 80 million US dollars before December 31, 2010, and 12 years from 2011 to 2013. Before the 31st of the month, each payment was 30 million US dollars, totaling 90 million US dollars.

In addition to the $200 million in cash payments, SMIC will issue 1.789 billion new shares to TSMC, representing approximately 8% of the issued share capital of SMIC on October 31, and grant TSMC the subscription price of HK$1.3 per share. The subscription warrants for the subscription of 695 million shares of SMIC (subject to adjustment) may be exercised within three years from the date of issuance. After the issuance of the shares, TSMC will receive a total of approximately 10% of the issued share capital of SMIC, subject to necessary government and regulatory approvals.

According to the settlement agreement, TSMC agreed not to be a director of the SMIC board of directors and not to participate in the daily operations of SMIC.