Taiwanese foundry companies are expected to see their wafer shipments and quarterly revenues continue to rise from this month to September, following stronger-than-expected results for the second quarter, Citigroup said.
The US brokerage raised its third-quarter shipment growth forecasts for both Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) by 5 percent each over the second quarter, Citigroup Global Markets analyst Roland Shu (徐振志) said in his client note on Friday.
Saying third-quarter demand would remain robust, Shu added that Vanguard International Semiconductor Corp (世界先進) would see a quarterly increase of 4 percent in wafer shipments this quarter.
“We believe that all the foundry companies will load at nearly full capacity in the third quarter,” the Taipei-based analyst wrote.
Shu said the strong third-quarter momentum would be driven by very strong wafer orders for WLAN, set-top boxes, 3G handsets and smartphones, digital TVs and hard-disc controllers.
Solid demand for complementary metal-oxide-semiconductor (CMOS) image sensors and high-voltage applications, as well as for LCD driver ICs, power management ICs and metal-oxide-semiconductor field-effect-transistors (MOSFET), was also cited by Shu as one of the reasons for the foundry companies’ full production capacity in the third quarter.
TSMC, the word’s largest contract chipmaker, and its smaller rivals UMC and Vanguard last week released their second-quarter results, which either hit the high end of previous forecasts or surpassed them.
TSMC said its consolidated second-quarter revenue increased 41 percent year-on-year to a record NT$104.96 billion (US$3.27 billion), UMC saw its second-quarter revenue grow 32 percent year-on-year to NT$29.75 billion, and Vanguard’s revenue posted a rise of 23.35 percent to NT$4.23 billion from a year earlier.
With anticipated consumer and business demand ahead of the back-to-school and holiday seasons, coupled with production outsourcing from independent device manufacturers (IDMs), TSMC and other foundry companies “will continue to see sequential revenue growth in July and August,” Shu wrote.
That growth means TSMC is likely to see a quarterly revenue increase of 2.41 percent to NT$107.49 billion in the third quarter and annual growth of 37 percent to NT$404.86 billion for the year, with an earnings per share (EPS) of NT$5.89, Citigroup said.
UMC’s third-quarter revenue will grow 10.54 percent to NT$32.88 billion from the second quarter and the full-year figure will increase 36 percent to NT$120.5 billion from last year, with an EPS of NT$1.65, according to the report.
Vanguard may see its third-quarter revenue rise 1.32 percent to NT$4.29 billion in the third quarter and increase 26 percent to NT$15.86 billion for the whole year, with an EPS of NT$1.0, the report said.
Taiwanese foundry companies are not alone, with renewed demand for consumer electronics products after last year’s downturn prompting global market researchers revising upward their full-year revenue forecasts for the global foundry sector this year.
iSuppli Corp said last week that global foundries would post total revenue of US$29.8 billion this year, up 42.3 percent from US$22.1 billion last year. Previously, the El Segundo, California-based researcher forecast overall revenue would rise 39.5 percent this year.
“During the first three quarters of 2010, foundries were under intense pressure to meet customer demand,” iSuppli’s chief semiconductor analyst Len Jelinek wrote in a statement on Thursday last week. “The pressure is leading to increased revenue, as consumer spending has come back with a vengeance following a dramatic downturn in the fourth quarter of 2008 and for all of 2009.”
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