Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday reported record-high sales last month of NT$37.39 billion (US$1.17 billion).
The result was in line with company chairman Morris Chang’s (張忠謀) statement in July of strong customer demand for TSMC chips.
The Hsinchu-based company’s consolidated revenue last month inched up 0.5 percent from July’s NT$37.22 billion. Compared with the same period last year, revenue grew 25.4 percent.
TSMC’s result “was slightly above our expectation of a slight month-on-month decline,” Citigroup analyst Roland Shu (徐振志) said in a report released yesterday.
Shu said that based on his channel checks, communication chip shipments to US suppliers Qualcomm Inc and Broadcom Corp topped TSMC’s sales last month.
TSMC said in July that third-quarter revenues would range from NT$109 billion to NT$111 billion.
“According to the current fab run rate, we believe this is not a tough target to meet,” Shu said.
However, TSMC’s shipments could decline about 9 percent sequentially in the next quarter, said Shu, who has a buy rating on TSMC with a price target of NT$78, implying 32 percent upside from its closing price of NT$59.30 yesterday.
Hon Hai
Hon Hai Precision Industry Co (鴻海精密), the world’s biggest electronics manufacturing service provider, yesterday also reported robust sales last month, rising 9.5 percent from July to NT$214.81 billion, as customers started building inventory for the year-end holidays.
Compared with a year ago, revenues last month nearly doubled from NT$108.24 billion.
“The [monthly] growth is mostly in line with market expectations as it began to ship products to customers in preparation for the holiday shopping season,” Yuanta Securities (元大證券) analyst Vincent Chen (陳豊丰) said.
“Hon Hai is making almost every consumer electronics item that is going to be a hot item during the holiday shopping season,” Chen said by telephone.
Hon Hai makes a wide range of consumer electronics ranging from Apple Inc’s iPhones, iPad and iPod Nano to Sony Corp’s LCD TVs, Chen said.
The firm is also expected to start shipping Microsoft Corp’s new-generation X-Box game console next month, Chen said.
As customers continue to build up inventory, Chen expects Hon Hai’s revenue to rise further this month and peak next month, allowing third-quarter sales to exceed the second quarter’s NT$653.99 billion.
Chen said there was still concern about gross margin erosion because of a 30 percent payroll increase for the company’s Chinese workers in June. He maintained his “hold” rating on Hon Hai.
Hon Hai shares rose 0.93 percent to NT$108 yesterday, beating the broader stock market’s 0.7 percent increase, while the stock price of TSMC fell 0.34 percent to NT$59.30.
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