Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, yesterday posted a stronger-than-expected 7.64 percent quarterly expansion for its first quarter revenue after last month’s revenue climbed to its highest level in five months.
TSMC’s revenue increased 9.2 percent to NT$37.08 billion (US$1.25 billion) last month from February’s NT$33.36 billion, marking the best monthly revenue since October last year. However, it represented a year-on-year contraction of 0.6 percent from NT$37.32 billion.
In the first quarter, TSMC accumulated NT$105.51 billion in revenue, exceeding the high end of the forecast range of between NT$103 billion and NT$105 billion that the chipmaker forecast in January. Customers’ inventory restocking demand for chips used in PCs and consumer products were the main drivers, the company said three months ago.
TSMC, which counts US graphics maker NVIDIA Corp as one of its clients, reported NT$104.71 billion in revenue for the quarter ending Dec. 31. On an annual basis, the revenue was up 0.1 percent in the first three months, from NT$105.38 billion a year ago.
The first-quarter figure slightly surpassed Credit Suisse’s NT$104.97 billion projection, as well as the NT$103.46 billion predicted by most analysts, according to a report released by Credit Suisse yesterday.
The quarterly results reflected TSMC’s expectation that the first quarter would be a stronger period than the seasonal pattern as company chairman and chief executive officer Morris Chang (張忠謀) had told investors in January. Over the past few years, first-quarter revenue dropped between 4 and 6 percent on average from the prior quarter, Chang said.
Chang also said at the time that the second quarter would be even better, based on the company’s booking forecast.
Credit Suisse analyst Randy Abrams expected TSMC to post 16 percent quarterly growth for the current quarter, fueled by a pickup in destocking demand for chips used in communications products.
“The sales upside is triggering more aggressive capital spending from TSMC,” Abrams said, adding that he expected TSMC to raise capital spending by nearly 17 percent to US$7 billion this year from the US$6 billion it had announced in January.
Abrams said TSMC’s 28 nanometer (nm) and 40nm advanced technologies would remain at full capacity into the current quarter, driven by communications and graphics ramp-up. Restocking demand in PCs and consumer products were filling up capacities of the lagging technologies, he said.
Meanwhile, TSMC rival United Microelectronics Corp (聯電) posted an 8.87 percent rise in revenue for last month to NT$8.19 billion from NT$7.52 billion. On an annual basis, it represented a decline of 14.55 percent.
TSMC’s chip testing and packaging partner Advanced Semiconductor Engineering Inc (ASE, 日月光) reported 8.4 percent revenue growth at NT$16.53 billion for last month, compared with NT$14.18 billion in February. That was a decline of 6.9 percent annually.
In the first quarter, ASE made NT$46 billion, down 7.1 percent quarterly, or an annual decrease of 6.3 percent, the Greater Kaohsiung-based company said in an e-mailed press release on Monday.