TSMC, UMC Expect Month-on-Month Sales Drop in March
March 15, 2001 (TAIPEI) -- Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) and United Microelectronics Corp. (UMC), two major microchip foundries in Taiwan, recently announced their sales for February.
TSMC's sales in February declined 28 percent from the previous month to NT$11.6 billion, and rose 29 percent year on year. UMC's sales in the same month dropped 21 percent from the prior month to NT$7.5 billion, but rose 19 percent from a year earlier. Both companies recorded their largest month-on-month declines since the second quarter of 1998. (NT$32.51 = US$1)
TSMC revised its estimated sales in the first quarter of the year downward from a decline of 25 percent from the fourth quarter of 2000 to a decrease of 26 percent. Its estimated sales for March, based on the downward revision, will be NT$12.1 billion, a slight increase from February. Although the estimated figure will not be easy to accomplish, considering the current business environment, the actual sales in March are not likely to be far from the estimate because output for the month has been fixed.
Its sales in the second quarter are likely to draw industry attention because there's no doubt that the prices will decline in the quarter, due to the sharp drop in the capacity utilization rate. Both sales and the profits in the quarter are expected to fall substantially due to slower growth in sales volume and the lower unit sales price.
Although TSMC said repeatedly that its business environment will recover in the second half of the year, there is still a possibility that the prices will be even lower in the third quarter and later. The keys to recovery in and after the third quarter are whether the company will be able to recover sales volume (the capacity utilization rate) and raise the percentage of the 0.18-micron or higher-end process.
Meanwhile, UMC did not disclose its estimated sales for the first quarter of the year, saying that it will see a drop that will be about the same as those marked by competitors, or a smaller drop. Based on TSMC's year-on-year decline of 25 percent as a benchmark, UMC's estimated sales in March will be NT$6.9 billion, a drop of 8 percent from the previous month. That means that, unlike TSMC, the firm's sales will continue to decline month on month in March.
The lower estimate in March is blamed on the firm's relatively high ratio of sales of communications-related products. The high ratio of such products is a positive factor.
Inventory adjustments of network equipment and semiconductors for cellular phone handsets began a quarter later than semiconductors for PCs, and inventories are under adjustment. In addition, although the foundry is specializing in niche products for special purposes, the estimated drop in sales may also be attributable to the estimated DRAM ratio of around 15 percent, or higher than TSMC's figure of less than 5 percent.
Related stories:
Taiwan's IC Makers See Lower-Than-Expected Sales in Dec.
TSMC's Morris Chang Envisions New Business Model in Semiconductor Industry
(Yasuo Nakane, Senior Analyst, Daiwa Institute of Research Taipei Representative Office, Special to Nikkei Microdevices) |
