Sat, Aug 11, 2012 - Page 13 News List

TSMC posts record sales in July

SLOWDOWN?A Credit Suisse analyst expects sales to fall by a single digit this month and next as utilization slows because of an inventory correction in the second half

By Lisa Wang  /  Staff reporter

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported record-high revenue again for last month, reflecting continued strong demand for its advanced 28-nanometer chips mainly used for mobile devices.

The world’s top contract chipmaker saw revenue last month grow 11.7 percent to NT$48.53 billion (US$1.62 billion) from June’s NT$43.43 billion, TSMC said in a statement. That was a 37 percent expansion from NT$35.43 billion in July last year.

Last month’s revenue beat Credit Suisse’s forecast of NT$45.2 billion, but the foreign broker expects TSMC to see slower growth this month and next.

“We believe the growth momentum should slow in August and September as utilization begins to slow” because of an inventory correction in the second half, Credit Suisse analyst Randy Abrams said in a report issued yesterday.

A monthly decrease of 5 to 6 percent this month and next would still allow TSMC to reach the higher end of its forecast range of NT$138 billion for the current quarter.

On July 19, TSMC forecast revenue would hit a new record this quarter by increasing between 6 percent and 8 percent sequentially to between NT$136 billion and NT$138 billion, compared with NT$128.06 billion in the second quarter.

“We expect a very good third quarter,” TSMC chairman and CEO Morris Chang (張忠謀) told investors at the time.

Abrams said in the report that he believed demand for TSMC’s 28nm chips remained tight because of capacity constraints, while demand for 40nm capacity would remain full thanks to low-cost smartphone chip orders from MediaTek Inc (聯發科), the nation’s biggest handset chip supplier.

TSMC said last month that it expected third-quarter shipments of 28nm chips would double sequentially, as output and yields have surpassed the targets it set in January.

The company said it would ramp up the production of 28nm chips to 68,000 12-inch wafers a month, helping it catch up with customers’ demand and boost revenue contribution from 28nm chips to 20 percent by the end of the year, from 5 percent last quarter.

TSMC supplies 28nm chips to US chipmakers Qualcomm Inc and Nvidia Inc.

Abrams retained his “outperform” rating on TSMC with target price at NT$95, implying an upside of 15.85 percent from its closing price of NT$82 yesterday.

Separately, MStar Semiconductor Inc (晨星半導體), the world’s biggest supplier of chips used in LCD TVs, yesterday said revenue edged up 0.4 percent to NT$2.92 billion, compared with NT$2.907 billion in June. On an annual basis, that was an increase of 8.6 percent from NT$2.69 billion.

MStar, which MediaTek said on June 22 it would acquire in a NT$115 billion deal, said on Thursday that MediaTek had bought 282 million of its shares, exceeding a minimum 40 percent, or 212 million shares, acquisition requirement.

MediaTek is scheduled to complete the transaction early next year, which has gained approval by Taiwan’s regulators, including the Fair Trade Commission, the Financial Supervisory Commission and the Ministry of Economic Affairs.

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