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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (52778)	9/21/2001 5:46:57 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

TSMC says operating income will exceed expectations By Faith Hung EBN (09/21/01 12:13 p.m. EST) HSINCHU, Taiwan -- Taiwan Semiconductor Manufacturing Co. offered surprisingly good news today, stating that operating income would surge in the third quarter, even after the terrorist attacks on the U.S. threatened to further weaken the stagnant chip industry. TSMC, the world's largest silicon foundry, said that it has revised its view to be more optimistic than guidance released in July on income through December. The company currently expects third-quarter operating income "to be at least five times" greater than the previous quarter, and that performance in the fourth quarter will be even better. “Despite the terrorist attack on September 11 that led to the slump of the stock markets worldwide, TSMC reaffirms its gradual recovering trend,” the Hsinchu-based company said in a statement. “The orders TSMC has received for the period from September through the end of this year show a high concentration of high-end and more profitable products.” TSMC's statement challenges the widely held belief that the terrorist attacks will destroy chances for a rebound in global demand in the fourth quarter. U.S. market research house IC Insights Inc. forecast earlier this week that the current quarter would show a 15% slide in chip sales sequentially, with flat sales for the December quarter. “TSMC's remarks caught a lot of people by surprise,” said Alfred Yin, research head of BNP Paribas Peregrine Securities in Hong Kong. He added that the market consensus for the foundry's third-quarter operating income is about twice the second quarter's figure, which stood at $8.23 million, plunging 98% from the previous year. Jesse Chou, a spokesman of TSMC, attributed the better-than-expected guidance to a slight pickup in the wireless sector and more advanced process technologies that customers overall are choosing for their products. “Demand for our 0.18 micron, 0.15 micron and 0.13 micron technologies continues to rise,” he said. “That should boost our average selling prices.” In the quarter to June, technologies of 0.18 micron and below made up 26% of TSMC's sales, jumping from just 5% in the year-ago period. TSMC's operating income outperformed the company's forecast growth rate in both July and August, the statement said. Still, some analysts questioned whether TSMC's overall income might ultimately prove stagnant in the third and fourth quarters as its Wafer Tech and Vanguard International Semiconductor Co. units suffer losses, and consumer confidence diminishes in the aftermath of the terrorist attacks. “Companies in the IC industry were counting on the Christmas shopping spree to generate better sales and profits in the fourth quarter,” said Jack Chen, a senior analyst with Prudential Financial Securities Investment Trust in Taipei. “With the uncertainty hanging over the terrorist attack, however long it may last, those hopes are doomed to go up in smoke due to waning consumer confidence.” Consistent with that expectation of lower consumer confidence, sales for Taipei-based Via Technologies Inc., one of TSMC's top 10 customers, “won't be as good as it had expected” due to the attack, according to Frank Jeng, Via's marketing director for Greater China. TSMC is using 40% of its production lines, below the 50% required for the company to break even, BNP's Yin said. Foundry rivals United Microelectronics Corp. and Chartered Semiconductor Manufacturing Co. of Singapore are in more dire straits, running at capacities of about 35% and 20%, respectively. In July, TSMC told institutional investors that its monthly sales had bottomed out in May and June.