TSM raises guidance, signalling Q1 bottom
Tue Mar 10, 2009 4:31am EDT
By Baker Li
TAIPEI, March 10 (Reuters) - Top contract chip maker TSMC (2330.TW) on Tuesday sharply raised its first-quarter sales and margin forecasts due to rush orders from China, indicating a trend of falling sales that began six months ago had hit bottom.
TSMC (TSM.N) now expects first-quarter sales to reach T$36 billion-T$38 billion ($1 billion-$1.1 billion), better than an estimate of T$32 billion-T$35 billion made in January, but still lower than the fourth quarter's T$64.6 billion.
It also expects a first-quarter an operating profit margin of 0 percent to negative 2 percent, against negative 15-19 percent previously.
"TSMC's first-quarter business is expected to be better than the company's previous guidance ... primarily due to rush orders from customers, especially from the mainland Chinese market, and a stronger U.S. dollar," TSMC CFO Lora Ho said in a statement.
Since late last year, most customers of TSMC, UMC (2303.TW) and Singapore's Chartered Semiconductor (CSMF.SI), the world's three biggest chip foundries, had been reluctant to place new orders for chips used in PCs, cellphones, flat screen TVs and other high-tech goods.
Chip foundries make chips for chip designers without their own fabrication plants or chip makers that are increasingly outsourcing manufacturing to focus on design and sales.
As part of its efforts to help Taiwan, China pledged in December to buy $2 billion worth of Taiwanese flat screen monitors to support the industry during the downturn.
That pledge came as ties between China and Taiwan warm under a China-friendly administration that took office last year.
"It is not certain to say the economy will become better all the way but visibility of orders for personal computers, notebooks and panels can be seen through April," said Tiffany Chen, who tracks the semiconductor industry for Taiwan's KGI Securities.
TSMC posted weaker fourth-quarter earnings, while both UMC and Chartered Semiconductor lost money in the same period. Chartered said on Monday it now expects to see a smaller loss for the current quarter. |
