Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday posted a 24.7 percent increase in quarterly profits year-on-year and set a record high for its net profit.
Net income rose to NT$40.72 billion (US$1.39 billion) in the quarter ending Dec. 31, compared with NT$32.67 billion in the same period of last year. For all of last year, net income soared 81 percent to NT$161.61 billion, from NT$89.22 billion in 2009.
However, on a quarterly basis, the fourth-quarter profit fell 13.2 percent from a historical high of NT$46.94 billion in the third quarter after a wave of recovery from the global economic slump peaked.
TSMC expected revenues this year to expand more than 20 percent in US dollar terms from last year’s record high of NT$419.54 billion, chairman and chief executive Morris Chang (張忠謀) told an investors’ conference, while the global semiconductor industry, except the memory sector, would grow 7 percent this year.
“No one expects [TSMC] to outperform the [semiconductor] industry so much,” said Jonah Cheng (程正樺), a semiconductor analyst with UBS Securities Pte Ltd in Taipei.
Credit Suisse analyst Randy Abrams expects TSMC’s revenues to grow by 15 percent year-on-year in US dollar terms this year, fueled by robust demand for smartphones and tablet devices.
TSMC said it currently supplies 60 percent of the logic chips used in Android-based tablets and 45 percent of the logic chips used in all smartphones around the world.
“The forecast demand from our customers for 2011 outpaces the supply under our current capacity. We expect to continue to fully utilize our capacity this year,” Chang said.
TSMC plans to spend US$7.8 billion on capacity expansion, setting a new record after the US$5.94 billion it spent last year. The new capital spending will help TSMC increase capacity by 20 percent this year from last year, Chang said.
He said a recent decision by Microsoft to develop an operating system for use on chips designed by ARM Holdings PLC, would give TSMC’s customers more opportunities in the mobile computing sector and give TSMC more opportunities to grow with its customers.
The chipmaker counts Nvidia Inc and Qualcomm Inc among its customers.
Yesterday, the firm also said it has worked with Spreadtrum Communications Inc in launching the Chinese handset chipmaker’s first 3G TD-SCDMA base band processor using TSMC’s 40-nanometer technology.
In the first quarter, revenues are expected to decline between 4.67 percent and 3.14 percent to between NT$105 billion and NT$107 billion, from last quarter’s NT$110.14 billion, as inventories are expected to remain higher than the usual seasonal level.
Gross margin would drop to between 47 percent and 49 percent this quarter, from 49.8 percent in the final quarter of last year, TSMC said, while its operating profit margin would slide to between 35 percent and 37 percent in the current quarter, from 37.7 percent last quarter.
TSMC shares rose 0.8 percent to N$75.2 yesterday, while local rival United Microelectronics Corp (聯電) jumped 3.45 percent to NT$18. The TAIEX increased 0.52 percent.
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
SENSOR BUSINESS: The Taiwanese company said that a public tender offer would begin on May 7 through its wholly owned subsidiary Yageo Electronics Japan Yageo Corp (國巨), one of the world’s top three suppliers of passive components, yesterday said it is to launch a tender offer to fully acquire Japan’s Shibaura Electronics Co for up to ¥65.57 billion (US$429.37 million), with an aim to expand its sensor business. The tender offer would be a crucial step for the company to expand its sensor business, Yageo said. Shibaura Electronics is the world’s largest supplier of thermistors, with a market share of 13 percent, research conducted in 2022 by the Japanese firm showed. If a deal goes ahead, it would be the second acquisition of a sensor business since