DJ Taiwan Chip Giants' Record Jul Sales Underscore Strength
09 Aug 08:49
By Dan Nystedt
Of DOW JONES NEWSWIRES
TAIPEI (Dow Jones)--The world's top two producers of custom-made chips for
computers and other electronic gadgets announced record monthly sales in July,
underscoring the strength of the semiconductor industry even as investors worry
about an impending downturn.
Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract
chip maker, said Monday revenue in July rose 31% to NT$23.15 billion
(US$1=NT$34.106), from NT$17.65 billion a year earlier. The number was slightly
ahead of analysts' expectations, and marked TSMC's fourth straight monthly
revenue record, beating the NT$22.52 billion it posted in June.
TSMC's smaller rival, United Microelectronics Corp. (UMC), also of Taiwan,
said its July revenue surged 60% to NT$11.20 billion, from NT$7.01 billion a
year earlier. That number also beat expectations, and shattered UMC's previous
monthly high of NT$10.87 billion posted in November 2000.
Companies in Taiwan, unlike those in other markets, are required to announce
their monthly sales, providing a uniquely frequent window on their performance.
TSMC and UMC, both of which make chips designed by customers such as Texas
Instruments Inc. (TXN) and Motorola Inc. (MOT), are seen by many analysts as
barometers of the broader technology industry due to their mix of customers and
products.
The two companies are in the middle of their strongest years since the global
technology bubble peaked in 2000.
In the second quarter, TSMC's net profit doubled from a year earlier to an
all-time high of NT$23.41 billion. UMC's second-quarter net profit nearly
quintupled from the year-ago period to NT$12.70 billion, the highest level
since the fourth quarter of 2000. Executives at the two companies have said
they see no signs of a slowdown.
But many analysts and investors have become alarmed at reports of mounting
inventories among the chip makers' customers. They also fear that shaky
consumer demand in the U.S., where soaring oil prices are hurting the economic
recovery, could mean slow sales during the back-to-school and year-end holiday
shopping periods.
"The record highs are impressive for both companies, but people are looking
further down the road to determine how much of a drop is in store for the
semiconductor industry," said James Huang, a semiconductor analyst at SinoPac
Securities.
In that context, he said, the results "don't matter. In July and August,
demand should remain strong. But in September, that's when we should see a
decline."
The July figure brought TSMC's revenue for the first seven months of 2004 to
NT$145.53 billion, up 36% from NT$106.90 billion a year earlier. UMC's revenue
in the January-July period rose nearly 41% to NT$65.70 billion, from NT$46.62
billion a year earlier. |
