Royal Philips sells shares in chip maker

ROYAL Philips Electronics NV, Europe's biggest maker of consumer electronics, will record a profit of 530 million euros (US$780 million) in the fourth quarter from selling shares of Taiwan Semiconductor Manufacturing Co.

Philips sold 800 million shares of Taiwan Semiconductor for US$1.5 billion as part of a stock buyback program by the Hsinchu, Taiwan-based company, Philips said in an e-mailed statement on Monday, according to Bloomberg News. The gain is non-taxable, Amsterdam-based Philips said.

The sale is part of Philips's plan to sell all its Taiwan Semiconductor stock before the end of 2010. Philips is exiting the chip business to focus on appliances, medical scanners and lighting.

Chief Executive Officer Gerard Kleisterlee has sold most of the company's semiconductor unit, NXP BV, and said in March that Philips would sell the Taiwan Semiconductor stake.

Philips holds 1.3 billion Taiwan Semiconductor shares, or a five-percent stake, with a market value of 1.7 billion euros.

Taiwan Semiconductor said on November 13 it would repurchase US$1.5 billion of stock from Philips and other investors. Philips also is lowering its holding in LG.Philips LCD Co, a venture formed with LG Electronics Inc that makes liquid-crystal displays.

The asset sales are helping to pay for dividends, stock buybacks and acquisitions.