Sat, Dec 05, 2009 page12

• TSMC to ramp up spending next year

  GLOBAL RECOVERY A semiconductor industry analyst at Credit Suisse predicted that the company’s spending on new equipment could be as much as US$4 billion

  • By Lisa Wang / STAFF REPORTER
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  Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday said it planned to ramp up spending on new facilities and equipment next year as part of an effort to stay ahead of peers by taking advantage of the global economic recovery.

  The company’s expansion plans also matched better-than-expected pickup in the global economy, which is expected to rebound by 3.5 percent annually rather than 3 percent, as TSMC estimated in October, the company said.

  “It’s all related. When the world economy dips, the semiconductor [industry] dips,” TSMC chairman and chief executive Morris Chang (張忠謀) said in a keynote speech during the company’s annual supply chain management forum.

  With the help of stimulus and bailout packages from major developed countries, especially the US, “I think we can all be reasonably optimistic about economic future,” Chang said.

  “So, the next two years look good, especially 2010,” Chang said, giving his outlook on the world’s semiconductor industry.

  Revenues in the ­semiconductor industry may grow by 9 percent year-on-year next year and 5 percent in 2011, a rebound from this year’s 11 percent contraction, TSMC said.

  To seek growth from recovering market demand, TSMC will allocate “much higher” capital spending next year than the US$2.7 billion budgeted for this year and US$1.8 billion last year. In October, the company only said the spending would be “higher.”

  Next year, contract chipmakers led by TSMC will track the growth of chip designers, which are expected to grow by 16 percent next year and 8 percent in 2011, Chang said, adding that TSMC generates 75 percent of its revenue from supplying chips to chip designers.

  TSMC will outpace competitors, he said. Randy Abrams, a semiconductor industry analyst at Credit Suisse, predicted that TSMC would spend as much as US$4 billion on new equipment next year, a report said on Thursday.

  “We believe low inventory and good demand keeps 12-inch [plants] full into the first quarter of 2010, with a moderate seasonal pullback on 8-inch [plants],” Abrams said in the report.

  TSMC’s revenues may slide by mid-to-high single digits in the conventionally slack first quarter from this quarter, versus an earlier estimate of a 10 percent decline, Abrams said.

  This quarter, revenues may be between NT$90 billion (US$2.8 billion) and NT$92 billion, the chipmaker projected in October.

  Meanwhile, Chang yesterday did not respond to a reporter’s question about whether the company is interested in acquiring local solar cell companies as he rushed toward an elevator after the speech.

  Despite market speculation that TSMC may be interested in acquiring local solar cell makers, such as Motech Industries Inc (茂迪) and Neo Solar Power Corp (新日光能源), no company spokesperson was available to confirm the potential deals.

  Motech, the nation’s biggest maker of solar cells, saw shares surge 4.5 percent to NT$129 yesterday, the highest since Oct. 27 last year, while Neo Solar rose limit-up to NT$76.5, Taiwan Stock Exchange data showed.

  TSMC shares were unchanged at NT$61.5 yesterday.
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