TSMC says Q1 market share rose

Taiwan Semiconductor Manufacturing Co (台積電), the world's largest supplier of made-to-order computer chips, said that its global market share rose to more than 50 percent in the first quarter from 47 percent for the whole of last year.

"Our market share will rise further in the future," president Rick Tsai (蔡力行) told reporters yesterday at the company's annual technology symposium for clients in Hsinchu, where Taiwan Semiconductor is based.

The company had a 50 percent share of the market for the whole of 2003, he said.

65 nanometer

Taiwan Semiconductor will start shipping 65-nanometer technology chips in the first quarter next year, he said.

The technology enables the company to shrink spaces between transistors on chips to 65 nanometers from its previous smallest of 90 nanometers, allowing it pack more than 750 billion transistors on to a single 300mm wafer, it said.

The 90-nanometer technology accounted for 4 percent of the company's total revenue in the first quarter and will make up more than 10 percent of sales in the second half, Tsai said.

Tsai told the more than 600 clients at the symposium that the company believes the global chip industry will grow at an average rate of 10 percent between now and 2010, compared with 15 percent in the period from 1980 to 1995.

"Clients' inventory has been reduced to a normal level and overall the market has improved," he said. "Pricing pressure has eased." Tsai said the company will invest cautiously, and only when demand from customers and markets calls for it.

Capacity expansion

"We're pursuing sustainable partnerships, enabling customers to develop new products while allowing Taiwan Semiconductor to continue capacity expansion," he said.

On May 10, the company revised its charter to allow its president to become chief executive, paving the way for the retirement of its chairman.

Chairman Morris Chang (張忠謀), 73, said he would resign at the appropriate time and wouldn't do so without adequate notice.

After the shareholder meeting on May 10, the board met to appoint Tsai chief executive and F.C. Tseng (曾繁城) as vice chairman.

Tseng will no longer be deputy chief executive, the company said in an e-mailed statement.

Both appointments will be effective July 1, the company said. Chang will only be chairman and no longer serve as chief executive.

Chang, who founded Taiwan Semiconductor in 1987, was the president and chief operating officer of General Instrument Corp from 1984 to 1985, according to his company's Web site. He was at Texas Instruments from 1958 to 1983, most recently as group vice president responsible for worldwide semiconductor business, the Web site said.

Taiwan Semiconductor last month reported its first quarterly profit decline in two years after customers cut orders to reduce inventories. First-quarter net income fell 11 percent to NT$16.8 billion, or NT$0.72 a share, from NT$18.8 billion, or NT$0.80, a year earlier, the company said.

Shares of Taiwan Semiconductor rose NT$0.2 to close at NT$56.00 in Taipei. The stock has risen 11 percent this year, compared with a 3 percent drop in the Hang Seng index.