TSMC subsidiary to raise $10 billion to manage currency fluctuations

Taiwan Semiconductor Manufacturing Co. (TSMC) is boosting its overseas subsidiary, TSMC Global Ltd., with a $10 billion investment to strengthen its defenses against unpredictable currency changes. This is the company’s largest move yet to stabilize its finances amid a volatile Taiwan dollar, which recently saw its biggest daily gain since the 1980s. The plan involves issuing new shares to increase the unit’s capital, helping it better handle foreign exchange risks and reduce hedging costs.

TSMC Global, based in the British Virgin Islands, manages the chipmaker’s international investments and currency hedging. The Taiwan dollar’s recent rise has raised concerns in Taipei about the nation’s export-driven economy. This marks the third time since 2024 that TSMC has injected capital into its subsidiary during periods of currency appreciation, giving TSMC Global more flexibility to navigate exchange rate challenges.

The cost of hedging has spiked this year, with currency volatility hitting a 14-year high, prompting banks to adjust their margin requirements, according to Philip McNicholas, an Asia strategist at Robeco in Singapore. This move comes as TSMC’s U.S.-listed shares dropped 2.5% last week, alongside declines in the broader semiconductor market. Despite these challenges, TSMC remains the world’s leading contract chipmaker, and this capital injection underscores its commitment to managing global financial risks effectively.