Taiwan chip major creates new billionaire on iPhone outlook

Climbing valuation fuelled by optimism for a revenue boost from the upcoming iPhone release

A TSMC facility in Taiwan. The chairman Morris Chang has become a billionaire thanks to Apple. Reuters / Tyrone Su

The chairman of the world’s largest contract chip maker has become a billionaire thanks to expected demand for Apple’s new iPhone.

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

The climbing valuation is being fuelled 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.

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

The Taiwanese chip major has weathered a slowdown in the global smartphone market, increasing revenue 12.4 per cent last year to NT$947.9 billion (Dh107.98bn) 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 $180bn, making it the most valuable company on Taiwan’s stock exchange. Hon Hai Precision Industry, the listed flagship of the iPhone assembler Foxconn Technology, is the second-most valuable company on the exchange, rising 56 per cent in the past year to $67.6bn.

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

Mr 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 per cent stake.

The graduate of Massachusetts Institute of Technology and Stanford University spent the majority of his career working for Texas Instruments. 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 the chief executive in 2005 only to return when TSMC’s business stagnated, serving another stint as chief executive between 2009 and 2013.