The world's largest manufacturer of made-to-order computer chips, Taiwan Semiconductor Manufac-turing Co (TSMC,
"TSMC's May sales are forecast to report record sales of NT$18 billion," said James Huang, (黃建銘), an analyst at SinoPac Securities Corp (建華證券).
"Order bookings from the high-end continue to see strength," he said.
Consumer products such as graphics chips used in gaming consoles and networking chips used to connect computers to the Internet had seen the highest increase in orders, Huang said.
Last month TSMC's sales results were NT$15.3 billion, up 14 percent on the same month last year.
The company is also expected to see an increase in productivity, and more orders coming in.
The percentage of total possible output TSMC will use -- known as the capacity utilization rate -- will rise to 85 percent from 67 percent in the first quarter, and for each US$1 of products it sold this month, it received US$1.40 in new orders, Huang said.
The ratio of orders to sales is known as the book-to-bill ratio. A ratio higher than 1.0 means sales are increasing. TSMC has a very healthy book-to-bill ratio of 1.4.
Another chip-industry analyst at HSBC Securities in Taipei said the signs of an upswing at TSMC are even stronger.
"Our in-house predictions are even better than most analyst predictions," said Abraham Lu (呂因彰).
"TSMC will definitely see more than 20-percent growth this year," he said.
TSMC's improved performance may be due to the fact that it is winning more outsourcing contracts from overseas firms desperate to cut costs and cease their own manufacturing operations.
"Much of the demand is due to a production reshuffle," Lu said. "TSMC is winning outsourcing orders from the Japanese. This doesn't link to end-user demand."
Others disagree, saying there are signs of increased end-user demand for computer products.
A turnaround in the US economy may be driving the increase in orders, according to an analyst at research firm Gartner Dataquest Inc in Taipei.
"The US economy looks fine, better than it was before, in fact," said semiconductor industry analyst Ben Lee (
"Better economic performance in the third and fourth quarter in the US will drive demand in the semiconductor market," he said.
Lee agreed that consumer electronics and networking chips would fuel growth.
At the beginning of this year, Gartner predicted a strong recovery in the chip industry, calling for a more than 20-percent increase in shipments compared to last year.
TSMC's chairman Morris Chang (
"Twenty percent growth seems very conservative," Lee said. "I think if Chang makes a new forecast in the middle of the year, it will be higher than 20 percent."
But an official at TSMC played down the figures yesterday.
"This is totally not new at all," TSMC's spokesman Tseng Jin-hao (
"We said our utilization rate would increase to 80 percent in the second quarter at our first quarter investor conference and we also said shipments would increase 20 percent."
The book-to-bill ratio prediction was a local newspaper editor's estimate, he said, without confirming TSMC's actual book-to-bill ratio for this month.
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