Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's largest contract chipmaker, said yesterday it remains confident in the long-term development of the global wafer foundry industry.
Despite a slowdown in the global semiconductor market, "TSMC still has faith in the global wafer foundry industry in the long term. In particular, we remain confident in TSMC's business outlook," company spokesman Tzeng Jin-hao (曾晉皓) cited TSMC chairman Morris Chang (張忠謀) as saying.
TSMC has forecast a recovery of the global foundry industry from the second quarter of this year after its bottoming out between the fourth quarter of last year and the first quarter of this year.
"As a world-class company, TSMC will continue to pursue a target of reaching an average return on equity [ROE] of 20 percent in the long run," Tzeng said.
In 2001, TSMC's ROE fell to 5.37 percent from 31.43 percent recorded in a year earlier.
Tzeng said the economic slowdown had undermined the company's ROE last year, although the data was not immediately available.
TSMC's net profit in the fourth quarter of last year dropped 43.5 percent over a year earlier to NT$2.55 billion (US$73.2 million).
The gross profit margin for the fourth quarter fell to 26 percent from 32 percent recorded in the third quarter.
But the company's net profit for all of last year was US$21.61 billion, 49 percent growth over the US$14.48 billion a year earlier.
Tzeng said the recent profit glitches of the global contract chipmaking industry did not necessarily mean the sector had entered an era of low profit margins.
"As the industry recovers in the second quarter as expected, profit margin will improve accordingly," he said.
TSMC gained the government's conditional approval before Lunar New Year to build an US$898 million eight-inch wafer plant in China. It was the first Taiwanese contract chipmaker to apply for permission to build a plant in China after the government last year relaxed a ban on such investments.
The government now allows local chipmakers to open up to three eight-inch wafer plants in China by the end of 2005 but only if they use equipment that has been phased out in Taiwan and expand investments in their domestic 12-inch plants.
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