TSMC Uses 80 Pct. of High-End Production Lines
October 19, 2001 (TAIPEI) -- According to foreign institutional investors, Taiwan Semiconductor Manufacturing Co., Ltd. has used 80 percent of the capacity on its 0.15-micron and 0.18-micron manufacturing process lines, with rising orders from nVidia Corp.
As a result, Merrill Lynch Securities Taiwan Branch has upgraded its forecast of TSMC's earnings per share for 2001. Credit Suisse First Boston and Goldman Sachs & Co. also are considering upgrading their ratings. Both Merrill Lynch and Goldman Sachs predict that more than 40 percent of TSMC's total production capacity will be in use in the fourth quarter, and encourage foreign investors to snap up TSMC shares and unload United Microelectronics Corp. shares.
Market observers say the real reason that foreign investors are predicting a rosier outlook for TSMC is that the booming demand for TSMC's high-end 0.18-micron and below versions of manufacturing processes demonstrates that sentiment in the high-end information technology market has started to pick up, and that mounting orders will keep TSMC's profit margins steady. Foreign investors believe TSMC will exceed its profitability forecasts this year.
Separately, foreign investors also have been cheered by nVidia's close tie-up with TSMC. Not only will the orders received from nVidia sustain TSMC's profit margin during this year, but nVidia's decision to increasingly source its production of graphic chips from TSMC also has raised the profile of the Taiwan make-to-order giant in foreigners' minds. However, the rumor that nVidia has extend the deliveries of graphic chips from November to next January, enabling TSMC's profitability to be sharply improved, has yet to be confirmed to foreign investment analysts by TSMC.
At present, nVidia remains the biggest client of TSMC, with the largest volume of orders on the basis of monthly calculation. Production demand from nVidia mostly focuses on the 0.18-micron and 0.15-micron manufacturing processes, with little call for the 0.13-micron version.
TSMC has launched test production of 0.15-micron version of nVidia's graphic chips in its 12-inch wafer plant, in the hope of supplying them there as readily as in its 8-inch plant. TSMC already has Transmeta Corp. and VIA Technologies Inc. on its list of clients requiring test production for the 0.13-micron manufacturing process, and has recently added a new client, Broadcome.
With nVidia's robust demand for high-end graphic chips, and growing orders from Intel Corp. for Pentium 4 production, TSMC expects the weight of 0.18-micron or below versions of manufacturing processes rise to 40 percent of its monthly sales, offsetting the previous slide in orders due to clients' inventory woes. The improving capacity use is expected to help TSMC bring its fourth-quarter sales up 5 percent at least over third-quarter sales.
(Commercial Times, Taiwan) |
