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TSMC shakes up foundry spin-off Vanguard

Posted: 09 May 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Taiwan Semiconductor Mfg? Mark LaPedus? TSMC? Vanguard Development Fund?

Taiwan Semiconductor Mfg Co. Ltd (TSMC) has moved to disband the board and executive team at its troubled foundry spin-off, Taiwan's Vanguard International Semiconductor Corp. As part of the moves, Vanguard's president was reportedly ousted over a disagreement with the board.

With backing from the Taiwanese government, TSMC, the largest shareholder at specialty foundry provider Vanguard, has appointed a new chairman for Vanguard. In addition, the company is also expected to handpick a new president for Vanguard, replacing embattled S.J. Paul Chien, its current president.

"The implementation of corporate governance has not proceeded smoothly over the last couple of months," explained a spokesman for TSMC. "The relations between the board and management team has not proceeded smoothly."

On Dec. 2, 2005, Vanguard said that Chien resigned as chairman and president of the company. The board appointed George Liu, VP of corporate development, as acting president until a successor was named. The board also elected Y.G. Quintin Wu as chairman. Both resolutions were supposed to become effective on April 4, 2006.

Last month, Vanguard held a board meeting and reappointed Chien as president. The board explained that it "approved this resolution in recognition of Mr. Chien's past achievements in transforming [Vanguard] from a DRAM company to an IC foundry company."

On May 5 TSMC appeared to have disbanded Vanguard's board and executive team. TSMC and the Development Fund within the Taiwanese government agreed on the Development Fund's nomination of former Minister of Finance Chuan Lin as chairman of Vanguard. Both also jointly nominated a slate of new candidates for Vanguard's board and supervisors. TSMC said it hopes the nominated candidates will win majority support from shareholders at Vanguard's annual general meeting on May 11.

TSMC and the Development Fund are Vanguard's two largest shareholders, holding 27.2 percent and 26.9 percent, respectively, for a total of 54.1 percent. The Development Fund nominated four directors to the board, including the chairman, two representatives and one unaffiliated director. TMSC has nominated two representatives and one unaffiliated director. In addition, both have each nominated one supervisor.

Founded in 1994, Vanguard is a spin-off of the Sub-Micron Project, a chip effort that was sponsored by the Industrial Technology Research Institute in Taiwan. Original investors included TSMC and 13 others. Vanguard was founded with the primary focuses on the production and development of DRAMs.

- Mark LaPedus
EE Times

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