TSMC's leapfrogging growth good sign for the industry
By Michael Kanellos
Staff Writer, CNET News.com
January 27, 2000, 10:55 a.m. PT
Taiwan Semiconductor Manufacturing Corp. (TSMC) reported that net income more than doubled in the past quarter and will continue to rise, a strong sign that the semiconductor business will continue to thrive.
Taiwan-based TSMC said that income for the fourth quarter came to $8.3 billion NT (U.S.$270 million), a 229 percent increase over the same period the year before. Revenue rose 104 percent to $769 million. Earnings per share came rose to 17 cents from 5 cents.
While net income was boosted by outside investments, operating income for the year rose 60 percent to $841 million from $523 million. For 2000, growth is expected to continue, the company told analysts on a conference call. Merrill Lynch analyst Dan Heyler stated in a report that revenue should grow 103 percent for the year through a 79 percent increase in wafer shipments and an increase in average selling prices.
In all, the numbers and the outlook seem to pave the way for positive times in the silicon industry. TSMC is the largest semiconductor foundry with close to half of the market. Rather than develop or design semiconductors, TSMC manufactures chips for companies that don't have their own fabrication facilities, or fabs.
As a result, foundries can be seen as something of a leading indicator. If the outlook is positive, semiconductor equipment companies such as Applied Materials will likely see an increase in sales, as will communications, graphics companies and others who use fabs.
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