TSM earnings. Jeff
TSMC 2nd-Qtr Earnings Jump 60% to NT$6.0 Bln; Output at Record
Hsinchu, Taiwan, July 27 (Bloomberg) -- Taiwan Semiconductor
Manufacturing Co., the world's largest maker of custom-designed
chips, said net profit surged in the second quarter as output
jumped to an all-time high.
Net profit rose 60 percent to NT$6.0 billion ($186 million)
from NT$3.76 billion a year earlier, TSMC said. That translates
into earnings per share of NT$0.80, beating the NT$0.68 to
NT$0.78 range estimated by three fund managers.
TSMC said it shipped a record 420,000 eight-inch equivalent
wafers in the three months to June, and the 0.25-micron wafers,
which are among the company's highest-margin products, accounted
for 21 percent of sales during the period. No comparative figures
were provided.
''The main drivers for the profit growth were higher prices
and better margins,'' said Simon Chao, who manages NT$1.6 billion
for President Investment Trust Corp. ''The growth is very likely
to continue through next year.'' TSCM stock makes up 5 percent of
Chao's portfolio.
TSMC is benefiting from stronger demand for chips used in
mobile phones, computers and consumer electronics. Orders from
Philips Electronics NV, Motorola Inc. and Cirrus Logic Inc. of
the U.S. bolstered TSMC's second-quarter sales by 43 percent to a
record NT$16.59 billion.
To capture the rising demand, TSMC and its unit Vanguard
International Semiconductor Corp. last month made two
acquisitions to secure additional capacity. TSMC paid $170
million for a 30 percent stake in Acer Inc.'s chip unit, and
Vanguard spent $83 million for 11 percent of Powerchip
Semiconductor Corp.
''We expect TSMC's earnings to grow 30 percent each in the
third and the fourth quarter'' annually, said George Lee, manager
of the NT$2.8 billion Precision Fund at Fubon Securities
Investment Trust Co. Lee has 4 percent of his money in TSMC
shares.
In the first half, TSMC earned NT$10.1 billion after tax, or
NT$1.34 per share, compared with NT$10.7 billion or NT$1.42 per
share a year ago.
Some 70 percent of TSMC's sales come from fabless design
houses, which are semiconductor designers that don't make their
own chips, such as Cirrus Logic. The rest comes from Philips and
other chip manufacturers in the U.S., Europe and Japan.
TSMC makes chips to customer specifications and doesn't
compete with its clients, whose brands appear on TSMC's products.
Today, the stock dropped 5.3 percent to NT$107.50 before the
earnings were disclosed, capping its gain at 67 percent in the
last 12 months.
(All figures in millions of New Taiwan dollars, rounded)
2Q 99 2Q 98 Y-o-Y% 1Q 99 Q-o-Q%
Change Change
----------------------------------------------------------
Net Profit 6,022 3,758 +60.3% 4,090 +47.3%
EPS 0.8 *0.5 +60.3% 0.54 +47.3%
Pretax Earnings 5,914 2,881 +105.3% 4,112 +43.8%
Jan.-June 99 Jan.-June 98 Y-o-Y%
Change
---------------------------------------------------------
Net Profit 10,112 10,705 -5.5%
EPS 1.34 1.42 -5.5%
Pretax Earnings 10,026 9,414 +6.5%
EPS on a post-split basis. EPS before the stock split was
NT$0.62.
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