Taiwan ECM takes spotlight
At least seven Taiwanese companies are considering selling shares which could raise a combined US$2.97bn, riding on surging global demand for artificial intelligence-related technologies.
Cloud IT infrastructure provider Wiwynn said on Monday it is planning to sell up to 17m shares via a rights issue or global depositary receipts. Based on its closing price of NT$2,330 on Thursday, the deal could raise some NT$39.6bn (US$1.25bn).
It plans to use the proceeds to purchase raw materials overseas, repay debts, replenish working capital and invest overseas.
A day later, silicon wafer manufacturer GlobalWafers said it aims to sell 36m–45m shares in the form of GDRs to purchase raw materials overseas. The deal could raise US$794m based on its closing price of NT$558 on Thursday.
Semiconductor maker WT Microelectronics joined the wave on Thursday by announcing a GDR plan which could raise around US$461m. Citigroup is understood to be leading the transaction.
Four other companies, including ROM and flash memory chipmaker Macronix International, have also drafted share sale plans. (See Table.)
The companies are keen to explore equity raisings as market sentiment has been positive on Taiwan stocks due to the global AI boom. Taiwan, which is home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co, plays an important role in the global technology supply chain for companies such as Nvidia, which has seen its own business expand dramatically.
As of Thursday, the Taiwan Stock Exchange Weighted Index was up 5.8% this year, taking the one-year gain to 22.3%.
“The Taiwan market has risen a lot but investors are still eager to increase their exposure as they believe the tech companies will continue to benefit from the robust demand for AI-related technologies,” said an ECM banker.
Taiwan’s official statistics bureau on Thursday revised upward the GDP growth forecast for 2024 to 3.43% from 3.35%, the highest in three years.
The bureau expects the rising demand for new technology applications such as AI, high performance computing and automotive electronics to support Taiwanese exports.
From China to Taiwan
With activity in Taiwan’s equity capital market picking up, bankers covering Greater China have shifted their focus to the island at a time when offshore China is seeing hardly any sizable deals.
Apart from primary follow-ons, bankers are also busy pitching the unwinding of cross-shareholdings, a big theme of corporate governance in Asia in the past year, to Taiwanese companies.
Bankers are also chasing some refinancing opportunities including for a US$700m CB of Hon Hai Precision Industry, which will become puttable in August.
“Bankers are flying to Taiwan more frequently these days for client meetings and now you can even bump into bankers from banks which didn’t do much in Taiwan in the past few years,” said another ECM banker.
“When there is no China, Taiwan becomes increasingly important even though the fees there are actually not high,” said the banker.
Taiwan’s international ECM deals have raised a combined US$1.07bn so far this year, including a US$252m sell-down in integrated circuit design company ASMedia Technology, a US$413m GDR of chip designer and manufacturer Alchip Technologies and a US$400m convertible bond from printed circuit board maker Zhen Ding Technology.
The amount is already equal to almost half of what the market raised from international deals last year – a combined US$2.2bn from six transactions.
Offshore China transactions, meanwhile, raised a total of US$483m in the first two months of the year, according to LSEG data.