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Taiwan's Chip Giant Creates a New Billionaire on iPhone Outlook

Bloomberg logoBloomberg 13-07-2017 Venus Feng

(Bloomberg) -- The chairman of the world’s largest contract chipmaker has become a billionaire thanks to expected demand for Apple Inc.’s new iPhone.

Taiwan Semiconductor Manufacturing Co. (TSMC) shares have surged 25 percent in the past year, lifting founder and Chairman Morris Chang’s personal fortune to $1 billion, according to the Bloomberg Billionaires Index. Chang, 86, owns 0.5 percent of the business directly and through his family, according to a May 2017 filing to the Taiwan Stock Exchange.

More about Gadgets and Smartphones

The climbing valuation is being fueled by optimism for a revenue boost from the upcoming iPhone release, as well as long-term expectations that cars, high-performance computing and the Internet of Things will be a new growth driver for its processors, according to Randy Abrams, a Taipei-based equity analyst at Credit Suisse Group AG. 

Elizabeth Sun, TSMC’s spokeswoman, declined to comment on Chang’s net worth.

Processor Demand

Morris Chang.: TSMC Chairman Morris Chang Speaks at the Company's Annual General Meeting © Bloomberg via Getty Images/Bloomberg TSMC Chairman Morris Chang Speaks at the Company's Annual General Meeting

The Taiwanese chip giant has weathered a slowdown in the global smartphone market, increasing revenue 12.4 percent last year to NT$947.9 billion ($29.4 billion) on demand for its A10 processor, which is used in Apple’s latest iPhone.

TSMC, which is due to report earnings Thursday after the close of trading, has a market cap of almost $180 billion, making it the most valuable company on Taiwan’s stock exchange. Hon Hai Precision Industry Co., the listed flagship of iPhone assembler Foxconn Technology Group, is the second-most valuable company on the exchange, rising 56 percent in the past year to $67.6 billion.

The Taiwan Taiex Electronics Index, a measure of the market’s technology stocks, is up 22 percent in the same period.

Chang founded TSMC in 1987 with backing from Taiwan’s government, which remains the company’s largest shareholder through the National Development Fund’s 6.4 percent stake.

Read more: Apple Supplier Sales Are Fodder for Both Bulls and Bears: Gadfly

The graduate of Massachusetts Institute of Technology and Stanford University spent the majority of his career working for Texas Instruments Inc. He established TSMC when he was in his mid-50s, where he became the first to build a semiconductor factory that made chips based on the designs of its customers. He stepped down as chief executive officer in 2005 only to return when TSMC’s business stagnated, serving another stint as CEO between 2009 and 2013.

To contact the reporter on this story: Venus Feng in Hong Kong at vfeng7@bloomberg.net.

To contact the editors responsible for this story: Robert LaFranco at rlafranco@bloomberg.net, Robert Olsen, Edwin Chan

©2017 Bloomberg L.P.

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