TSMC's Chang Issues Bright Business Forecasts
Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman and Chief Executive Morris Chang recently estimated the company's results for the fourth quarter of the year to surge further from the third-quarter levels, and forecast the silicon foundry segment to far outgrow the semiconductor industry in terms of revenue in 2011.
Chang estimated the company's consolidated revenue for the fourth quarter at NT$107-109 billion (US$3.4-3.5 billion at US$1:NT$31), gross margin rate at 48-50%, and operating margin rate at 35.5-37.5%. He said if the appreciation of the NT dollar is not factored in, the company's consolidated revenue for the fourth quarter would reach the NT$111.6-113.7 billion (US$3.6-3.66 billion) range, gross margin rate would hit 49.5-51.5%, and operating income rate would stand at 37.3-39.3%.
In the third quarter, the No.1 pure silicon foundry scored consolidated revenue of NT$112 billion (US$3.6 billion), net income of NT$46.9 billion (US$1.5 billion), an EPS (earnings per share) of NT$1.81, gross margin of 50%, operating margin of 38.4%, and net margin of 41.8%.
On the year-on-year basis, the third-quarter revenue was up 24.8%, the net income surged 53.6% and the EPS soared 54%.
Chang said demand for the company's foundry services was strong from all segments except computer in the third quarter. Last quarter, 0.13-micron and below accounted for 72% of the company's wafer revenues, followed by 65-nanometer technology's 29%, 40-nm technology's 17% and 90-nm process's 14%.
Chang also estimated that the wafer foundry sector would see revenue grow at annual rate of 14% in 2011, much higher than the average 5% increase projected for the entire semiconductor industry. TSMC, Chang said, would outperform its rivals next year in terms of revenue gain.
According to Chang, nstitutional investors estimated TSMC would see its 2011 revenue hit a new high of NT$500 billion (US$16 billion).
Chang ascribed the company's unmatched operating results mostly to its early approaching integrated device manufacturers (IDMs) over contract manufacturing offering.
Chang touted that demands for his company's contract manufacturing service remain excessive. He estimated excessive demands would likely award the company's after-tax net income of around NT$150 billion (US$4.8 billion), or diluted earnings of NT$5 per share, this year. In spite of the record high earnings, TSMC will maintain cash dividend pay at NT$3 per share next year, according to Chang.