Fri, Jan 28, 2011 page12

• TSMC Q4 profit increased 24.7 percent

  REPORT TO INVESTORS: TSMC chairman Morris Chang said the firm forecast revenues will expand by more than 20 percent this year and that it will fully utilize its capacity

  • By Lisa Wang / Staff reporter
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  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.
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