TSMC expects to miss year-end earnings target
By Faith Hung
EBN
(09/25/01 11:36 a.m. EST)
HSINCHU, Taiwan -- Just days after telling investors that operating income would jump dramatically in the months ahead, Taiwan Semiconductor Manufacturing Co. Ltd. today said it will probably miss this year's profit forecast as the terrorist attack on the United States dashes hopes for a fourth-quarter recovery.
The largest silicon foundry worldwide, TSMC was pinning its hopes on the Christmas season to help achieve its $746 million net profit target, which the company had set for the 12 months to December. Now, with only one third of the forecast having been achieved through June, TSMC said it won't be able to meet the full-year forecast.
In a recent interview, company chairman Morris Chang said that the attack would “prolong the bottom of the global IC industry, and any significant pickup won't come before the first quarter of next year.”
TSMC is among many manufacturers suffering from weak consumer confidence after terrorists attacked the World Trade Center and Pentagon Sept. 11, dealing a blow to an already slowing economy. Silicon foundry United Microelectronics Corp., TSMC's closest rival, is expected to post only a slight profit this year.
“Everyone was looking at 3Q as the bottom,” said Connor Liu, an analyst with SG Securities in Taipei. “How the attack will affect the industry is a question nobody can answer right now.”
TSMC declined to specify by how much the company expects to miss profit targets. According to regulators, companies trading on the Taiwan Stock Exchange must reduce forecasts when earnings are seen falling short by 20% or more.
Still, TSMC maintained guidance given last week that operating income in the September quarter will be at least five times the $8.2 million posted in the second quarter, and that the fourth quarter will be even better.
“Our 4Q business will surpass that of 3Q because two thirds of 4Q orders have been firm,” Chang said. |
