Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's largest supplier of made-to-order chips, posted a one-third drop in first-quarter profit because it bought more production equipment than it could use.
Net income dropped to NT$4.4 billion (US$126 million) from NT$6.6 billion in the first quarter last year, the company said.
Analysts had expected profit to fall by more than half to NT$2.9 billion.
Profit fell because the company bought more plant and equipment than it could win orders for to utilize fully. TSMC used 67 percent of its factory capacity in the first quarter, the same as a year ago, it said.
Sales, announced earlier, rose 10 percent to NT$39.3 billion from NT$35.8 billion.
TSMC's "revenue has clearly touched bottom in the first quarter of 2003," chief financial officer Harvey Chang (
The company's operating performance will improve in the second quarter, he said.
In response to slowing orders, TSMC has cut its planned spending on new equipment to as little as US$1 billion this year, having pared last year's budget to US$1.65 billion from an original US$2.5 billion.
Global chip sales rose at their slowest pace in seven months last month, according to figures on Monday by the San Jose, California-based Semiconductor Industry Association. They increased less than 2 percent last year after contracting by a third in 2001, the industry's worst-ever decline.
TSMC's return on equity, or net income as a percentage of shareholders' funds, was 5.9 percent in the first quarter, down from 9.4 percent in the year-ago period.
The company is aiming for a return on equity this year of 20 percent.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is