Foundry bottom? TSMC, UMC both report sales up in August from July
Taiwan chip makers see sequential growth as evidence that the downturn has hit bottom
Semiconductor Business News
(09/07/01 10:18 a.m. EST)
HSINCHU, Taiwan -- Solid evidence of a potential end to the silicon-foundry slump came from rivals Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp. today. For the first time since the downturn started, the world's two largest silicon foundries said monthly sales grew sequentially, with August revenues topping those in July.
TSMC, the world's largest pure-play chip foundry, announced its second sequential monthly sales increase in a row. The company's revenues were 4.9% higher in August at NT$9.028 billion ($262 million) compared to NT$8.604 billion ($249 million) in July. The company's July revenues were about 1% higher than in May.
Meanwhile, UMC today reported its first sequential monthly increase in sales during the foundry slump. The company's revenue nudged up 0.7% to NT$3.901 billion ($113 million) in August compared to NT$3.873 billion ($112 million) in July. This slight increase comes after UMC reported a slowing in revenues declines in July (-8.6%) and June (-14.4%) from the previous months.
A TSMC spokeswoman today said the company hit its revenue bottom during the months of May and June. She said TSMC is now expecting that the months of September through December "could follow this gradually improving trend."
Analysts believe the foundry business will experience a slow recovery, partly because of too much capacity, low fab utilization rates, and global economic weakness. In terms of wafer shipments, the recession-battered foundry business is expected to see unit volumes fall 25.7% in 2001, according to a new forecast from Semico Research Inc. The Phoenix-based research firm believes wafer volumes will pick up at a strong pace in 2002 with a 37.1% increase, followed by 23% growth in 2003 (see Sept. 6 story).
But relatively weak average selling prices and low fab utilization rates (under 25% at some foundry plants) will probably keep revenue growth at a slower pace in the next year, according to many market observers and chip managers.
TSMC reported that its net sales in the first eight months of 2001 were NT$83.451 billion ($2.4 billion), 13.1% drop from NT$96.010 ($2.0 billion) in the same period last year.
UMC, the world's second largest foundry, said its revenues in the first eight months of 2001 were 26.3% lower than the same period last year. The company's revenues totaled NT$46.370 billion ($1.3 billion) in the last eight months vs. NT$62.912 billion ($1.8 billion) in the same period last year.
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