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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: etchmeister who wrote (11642)	10/7/2004 9:23:24 AM
From: Proud_Infidel	Respond to of 25522

UPDATE 2-TSMC sales dip for first month in 7, may fall again Thu Oct 7, 2004 04:48 AM ET (Adds analyst comment) TAIPEI, Oct 7 (Reuters) -TSMC, the world's largest contract chip maker, said its sales fell in September for the first time in 7 months and warned they could continue to drop as demand falters amid a broad industry slowdown. The 1 percent dip from August ended a five-month streak of record-high revenues for Taiwan Semiconductor Manufacturing Co. (TSMC) (2330.TW: Quote, Profile, Research) (TSM.N: Quote, Profile, Research) . The fall suggested slowing consumer demand for electronics had seeped up the supply chain and finally caught up with the firm, which had surprised analysts with its resilience. TSMC's main competitor, United Microelectronics Corp. (UMC) (2303.TW: Quote, Profile, Research) (UMC.N: Quote, Profile, Research) , posted record high sales for the third month in a row, but analysts say it is only a matter of time before UMC's sales begin to fall as well. "Some softening of customer demand was seen over the past two months," TSMC Chief Financial Officer Lora Ho said in a statement on Thursday. "If this continues, the company's fourth quarter revenues would decline slightly versus the third quarter of 2004," she said. Company chairman Morris Chang had told analysts in July growth would extend into the fourth quarter. TSMC said September revenue reached T$23.17 billion ($684 million), up 22.5 percent from the same month last year but off from T$23.41 billion in August 2004. UMC reported September sales of T$11.86 billion, up 57.7 percent from a year earlier and up from August's T$11.51 billion. ONLY THE FIRST SIGN Companies such as Broadcomm Corp. (BRCM.O: Quote, Profile, Research) and Texas Instruments Inc. (TXN.N: Quote, Profile, Research) , who contract manufacturing of their chips to the Taiwan companies, have cut third-quarter sales estimates as they work off inventories of unsold chips. The pile-up of unwanted inventory has occurred as high oil prices and rising U.S. interest rates dampen consumer demand for devices like digital cameras, mobile phones and DVD players. "Growing inventory is only the first sign that business is getting worse," said Shawn Wang, semiconductor analyst at Taiwan's KGI Securities. "This decline is within everyone's expectations, so the impact on the share price will not be large, but it is still negative news," he said. "It's not so bad that shares will open sharply lower tomorrow but it's hard to avoid further losses." Wang said that while UMC was outperforming for now, he expected the firm's revenues would decline more sharply than TSMC in the fourth quarter due to UMC's higher exposure to the weaker consumer electronics and communications sectors. Markets have long expected that broad decline would affect TSMC and UMC sooner or later. Both firms' Taiwan-listed shares have slumped about 21 percent since the beginning of the year. September's performance nonetheless took TSMC's third-quarter revenue to a record-high T$69.74 billion, notching up a 27 percent gain from the year-ago period and a 7.5 percent rise from the April-June quarter. UMC's third quarter revenue also hit an all-time high of T$34.58 billion, according to Reuters calculations, showing a 60.55 percent year-on-year jump and a 18.52 percent gain from the second quarter. TSMC, which is nearly one-fifth owned by the Netherlands' Philips Electronics NV (PHG.AS: Quote, Profile, Research) , announced the results after the close of stock market trade in Taiwan. The issue ended unchanged at T$45.00, compared with a 0.70 percent rise in the benchmark TAIEX share index. UMC shares gave up 0.47 percent to close at T$21.20. (US$1 = T$33.9)