TSMC Issues Bullish Biz Forecasts
2010/01/29 | By Ken LiuTaipei, Jan. 29, 2010 (CENS)--Morris Chang, chairman and chief executive officer of Taiwan Semiconductor Manufacturing Co. (TSMC), yesterday said the company's foundry capacities, especially those for leading-edge processes, have been completely inundated with contracts and the company will spend US$4.8 billion on capacity expansion this year.
Chang made the remarks at an institutional investors conference in Taipei. The company has seized 80% to 90% of the market for leading-edge process foundry service. It will spend 94% of its 2010 capital expenditure on leading-edge process capacities.
He said TSMC, currently the world's No.1 pure silicon foundry, scored after-tax net income of NT$89.2 billion (US$2.7 billion), or NT$3.44 per share, on consolidated revenue of NT$295.7 billion (US$9.2 billion at US$1:NT$32) in 2009. The revenue result represents an 11.2% decline year-on-year.
In the fourth quarter alone, the company earned NT$32.6 billion (US$1 billion), or NT$1.26 per share, in after-tax net income on consolidated revenue of NT$92 billion (US$2.8 billion). The better-than-expected profit performance was due to high gross profit margin rate of 48.5% and the 2009 revenue represents a 2.4% increase year-on-year.
The company estimated its revenue for the first quarter of the year to slide 1.2-3.4% from the preceding quarter, to NT$89-91 billion (US$2.78-2.84 billion), roughly in line with the NT$91-93 billion (US$2.84-2.9 billion) range projected by institutional investors. The investors also project TSMC's first-quarter earnings at US$32-33 billion (US$1-1.03 billion) based on the firm's estimated gross profit margin rate of 46.5% to 48.5% and its estimated operating income rate of 35% to 37%.
Chang forecast the semiconductor market to grow at annual rate of 18% worldwide and silicon-foundry segment alone to grow at an annual pace of 29%. Institutional investors estimated the company's 2010 revenue to reach NT$400 billion (US$12.5 billion).
The top TSMC executive based his projections on the bullish estimates of a 14% growth in PC market and a 12% increase in mobile phone market.