Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, yesterday reported better-than-expected quarterly net income for last quarter on the back of more shipments of chips used in smartphones.
Net income grew 7.8 percent to NT$36.28 billion (US$1.27 billion) in the first quarter, compared with NT$33.66 billion a year ago, a company financial statement showed.
Compared with the fourth quarter of last year, net income shrank 10.9 percent from NT$40.72 billion.
This quarter, TSMC expects revenues to grow by between 3 percent and 5 percent to between NT$109 billion and NT$111 billion, from last quarter’s NT$105.38 billion, of which communications chips made up 48 percent, up from 39 percent a year ago and 47 percent in the fourth quarter.
The forecast beat most analysts’ expectations.
“[The] results and guidance hold up slightly better,” Credit Suisse semiconductor analyst Randy Abrams said in a research note issued yesterday.
TSMC chairman and chief executive Morris Chang (張忠謀) told investors that there was no supply disruption in the company’s supply chain and he did not expect any in the future.
However, the earthquake and tsunami in Japan last month will have some impact on the chipmaker’s demand this quarter because the “Japan earthquake probably has some effect on our second-quarter demand because it has affected our customers and our customers’ customers supply chain, but we don’t expect significant impact on our second-half demand. We think that, whatever effect it may have on our second-quarter demand, it will only last one quarter,” Chang said. “It is still a good year, except for the exchange rate.”
TSMC’s operating margin would fall 40 basis points for every 100 basis point depreciation of US dollar against the New Taiwan dollar, Chang said.
Chang said TSMC would stick to its original goal of growing its revenue by 20 percent this year from last year’s NT$419.54 billion, in which communications chips accounted for the biggest portion, nearly half the amount.
However, Chang trimmed his forecast for the world semiconductor market’s growth this year to 4 percent annually in terms of revenue from the 7 percent he estimated in January because of soft GDP growth in Japan, the US, Europe and even emerging countries.
The chipmaker will also keep this year’s capital spending unchanged at a record-high of US$7.8 billion.
Gross margin is expected to drop to between 45.5 percent and 47.5 percent this quarter, from 49 percent in the first quarter, because of a lower factory utilization rate and a strong NT dollar versus the US dollar.
On technological progress, TSMC further strengthened its leadership by increasing the number of customers completing qualification of its 28-nanometer technology, the most advanced technology available, to 89 from 70 three months ago.
The number is 10 times more than all TSMC’s competitors, Chang said.
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