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TSMC Chairman: Strong Revenue to Continue into H2

2014/08/08 | By Ken Liu

Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman Morris Chang said the company's consolidated revenue, operating profit, and after-tax net income will continue strengthening into the second half (H2) of the year, judging from the robust demand for silicon foundry service using 20nm and 28nm processes on 4G LTE smart phone chips.

The world's No.1 pure foundry player had consolidated revenue of NT$183 billion (US$6.1 billion) in Q2, up 23.5% from the previous quarter to top previous estimates. In that quarter, its gross margin ratio surged to 49.8%, operating profit ratio 38.6%, and after-tax net income up 24.7% from Q1 and 15.2% YoY to NT$59.7 billion (US$1.9 billion), or NT$2.3 per diluted share. Throughout H1, the company netted earnings of NT$4.15 per share.

The company projects consolidated revenue for Q3 to soar 12.6% to 14.2% from the previous quarter to stand between NT$206 billion (US$6.8 billion) and NT$209 billion (US$6.9 billion), roughly meeting market expectation of growth of 10-15% and hitting new high. Also, it estimates gross margin ratio of 48.5-50.5% and operating profit ratio of 38.5-40.5%, both leading market expectations.

Chang said that foundry services using 16nm and 20nm processes will drive corporate growth over the next three years after its 28nm process has strongly boosted growth in the last two years.

While spending US$9.6 billion on capacity expansion and R&D of leading-edge manufacturing processes last year, the company will budget roughly the same amount  for expansions this year and slightly more in 2015, according to Chang. (KL)