Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's largest contract chipmaker, said yesterday that net sales reached an all-time high of NT$57.8 billion in the final three months of last year.
Profit also soared to six times the level it reached in the same period in 2002, rising from NT$2.6 billion to just over NT$16 billion, chief financial officer Lora Ho (何麗梅) told investors yesterday afternoon.
"We are proud to be among the very few industry leaders whose 2003 top-line performance has surpassed levels achieved in the past," Ho said. "We expect the performance of the coming quarter to be at least as good as that of the fourth quarter of 2003."
TSMC chairman Morris Chang (
"Demand will improve in the communications segment, remain flat in the consumer segment and experience a seasonal decline in the computer segment," Chang said. "The communications sector will be the fastest growing sector of all sectors, not just for mobile phones, but for telecommunications infrastructure too."
One analyst welcomed Chang's bullish comments.
"Recovery in communications has been muted for over three years, so Morris saying that there is strong demand in the communications sector is a good sign," said Rick Hsu (徐禕成), an analyst with Nomura Securities in Taipei. "I am now anticipating more from communications chips."
The chip industry started to recover from a three-year slump in the spring of last year and since then TSMC has seen its production plants increase output to reach full capacity, or 101 percent, last quarter. Chang announced yesterday that the company would spend US$2 billion on new equipment this year to increase capacity and meet demand.
The need for expansion is pressing, Nomura's Hsu said.
"TSMC cannot drive business growth without expansion," he said. "The real issue is if they can get all the equipment they want from makers this year as inventory is tight at equipment sellers this year."
Despite rising demand and bulging production lines, the price TSMC gets for the chips it sells will not go up until the second half of the year, Chang said. "In the semiconductor industry in general price power is something every company aspires to but seldom achieves as there are simply too many alternatives," he said.
Chang refused to be drawn on a lawsuit TSMC filed last month against Chinese rival Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路) for patent infringement and trade secret theft, apart from saying, "we want to protect our intellectual property and proprietary technologies."
SMIC hired 100 former TSMC employees and is accused of trying to extract secrets from them.
Chang also did not comment on TSMC's planned 8-inch wafer production plant in Shanghai. The company was granted permission from the Taiwanese government to build the plant last year, but has not yet asked for permission to move equipment from Taiwan to start production there.
Analysts say TSMC is waiting until after the presidential election in March before making its next move.
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