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TSMC sees recovery amid strong Q2

Posted: 28 Jul 2005 ?? ?Print Version ?Bookmark and Share

Keywords:wafer fab? foundry?

Taiwan Semiconductor Mfg Co. Ltd (TSMC) projects a recovery in the lackluster foundry business in the second half of 2005, amid a jump in its own sales, profits and fab utilization rates for the second quarter.

On Tuesday (July 26), the silicon foundry giant reported sales of NT$58.52 billion ($1.84 billion) for the second quarter, up 5.1 percent from the previous period but down 9.8 percent from the like period a year ago.

TSMC (Hsinchu, Taiwan) said it earned NT$18.37 billion ($576 million) in net profit in the second quarter, down 21.5 percent from a year ago, but up 9.2 percent from the previous quarter.

Its fab utilization jumped to 85 percent in the second quarter, up from 78 percent in the first period but down from 106 percent in the like period a year ago.

The increase in second quarter revenue mainly resulted from a 14.5 percent increase in wafer shipments. But average selling prices (ASPs) fell 5.4 percent during the period, according to TSMC.

Revenues from advanced process technologies (0.13-micron and below) accounted for 43 percent of total wafer sales, compared to 45 percent previously.

Going forward, TSMC sees a better business climate in the overall foundry business, which has been hit by a slump in recent quarters. "Due primarily to demand recovery from our customers, our second quarter business had improved better than we guided previously," said Lora Ho, vice president and chief financial officer of TSMC, in a statement. "We expect the recovery to continue for the coming quarter."

The "end markets are pretty good, especially in the handheld and PC areas," said Rick Tsai, president and CEO of TSMC, during a conference call with analysts. "We expect a recovery in the second half."

For Q3, wafer shipments are expected to increase by a mid-teen percentage point sequentially. ASPs are projected to decline by a low-to-mid single digit percentage point sequentially.

Leading-edge processes are projected to be flat in Q3, while mature technologies are expected to grow, thereby pushing down ASPs, Ho said in a conference call with analysts.

The overall utilization rate is projected to exceed 90 percent in the third period, according to TSMC. The company maintained its capital spending figure of $2.5-to-$2.7 billion for 2005.

Ho indicated that TSMC's overall capital spending would be "close to the high end of the guided range."

Not all are benefiting from the recovery. Chartered Semiconductor Manufacturing Pte. Ltd. last week said that it has begun processing wafers from its initial 300mm wafer fab -- a month sooner than previously expected. But the troubled Singaporean foundry provider is still spilling red ink amid lackluster demand (see July 21 story).

When it reports on Thursday (July 28), Chinese silicon foundry provider Semiconductor Manufacturing International Corp. (SMIC) is projected to meet expectations for Q2, with a possibility of moving out of the red in Q3, according to an analyst (see July 25 story).

- Mark LaPedus

EE Times

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