Fri, Sep 17, 2010 - Page 12 News List

TSMC sees pre-tax profit jump

GROWTH The world’s largest chipmaker said its profits would grow more than 40 percent annually. The Hsinchu-based firm is also setting its sights on solar cell modules

By Lisa Wang  /  Staff Reporter, in Taichung

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest chipmaker, yesterday said its pre-tax profits would grow more than 40 percent annually this year, thanks to a resilient rebound in demand amid an improved global economy.

The Hsinchu-based chipmaker has outgrown the overall semiconductor industry over the years, TSMC chairman Morris Chang (張忠謀) said.

“This year is no exception. We will grow more than 40 percent [in terms of profits before tax and revenues] because last year was not good,” he said.

The global semiconductor industry would grow about 30 percent in revenue this year, Chang said, reiterating his previous ­forecast for the industry.

To meet Chang’s target, TSMC’s management team and staff would have to make at least NT$134 billion (US$4.21 billion) in profit before tax this year as the chipmaker made NT$95.46 billion in pre-tax profit last year.

When asked whether TSMC was still unable to satisfy customer demand, Chang said the “line is still there.”

Next year, “the industry will grow 5 percent [annually by revenue] and I believe we will grow more than 10 percent [in pre-tax profit and revenue],” Chang said.

“We’re in the right business. We are in the foundry [contract chip manufacturing] business. I think the innovative business model was an important reason for our success,” he said.

In June, Chang projected that the overall semiconductor industry would grow by between 4 percent and 7 percent over the period from next year to 2016.

Commenting on the chipmaker’s new green energy businesses, including solar energy and LEDs, Chang said revenues from the new businesses would account for roughly 10 percent of the company’s total revenues in 2015.

Rick Tsai (蔡力行), president of TSMC’s new businesses division, said yesterday TSMC was ­targeting becoming one of the world’s top-five solar cell module suppliers within the next five years using the CIGS technology transferred from thin-film solar cell maker Stion Corp, in which TSMC invested US$50 million in June to take a 21 percent stake.

“We believe CIGS technology is the most promising technology, given its high conversion efficiency and low manufacturing cost,” Tsai said.

The CIGS technology is still currently in the development stage and not one company in the world has massively produced solar cell modules using the technology.

Tsai said the chipmaker is looking to boost efficiency to 14 percent in the next three years from the current 12 percent and to 16 percent within five years.

TSMC said it planned to invest US$258 million in building its first solar cell module plant, which will have a 200 megawatt capacity each year during the initial phase and increase to 700 megawatt after the second-phase construction is completed.

A research and development center is also part of the investment plan.

The company is expected to ship its first batch of solar cell modules at the end of next year or early in 2012.

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