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

To: Tito L. Nisperos Jr. who wrote (29621)	4/20/1999 9:50:00 AM
From: Jeffrey D	Read Replies (2) \| Respond to of 70976

Tito, this should give the AMAT construction workers some motivation. Jeff << TSMC 1st-Qtr Earnings Jump 62% on Quarter as Gross Margins Soar Taipei, April 20 (Bloomberg) -- Taiwan Semiconductor Manufacturing Co., the world's leading maker of custom-design chips, said first-quarter earnings surged 62.3 percent from the previous quarter. TSMC said net earnings rose to NT$4.09 billion ($123.9 million), or NT$0.68 per share, from NT$2.52 billion in the three months to December, within estimates of between NT$0.55 and NT$0.80 per share made by four fund managers. Earnings in the first quarter of 1998 were NT$6.95 billion or NT$1.15 per share. ''Orders have flowed in at an amazing pace in the last two months,'' chief financial officer Harvey Chang told institutional investors. ''Many of our customers are concerned we won't have enough capacity to make the products they need.'' TSMC's growth is more evidence that semiconductor companies worldwide are rebounding after a supply glut and Asia's financial turmoil gave the industry its worst year ever in 1998. Fujitsu Ltd., Japan's largest computer maker and one of TSMC's clients, said in April it expected its chip sales to grow 10 percent this fiscal year. TSMC said 88 percent of its production lines were utilized in the quarter to March, up from 67 percent in the previous three months, as demand rose from Canada-based ATI Technology Inc. and from clients in the U.S. and Japan. Output increased to 319,000 wafers from 286,000 wafers during the same period, while gross margins jumped to 49.6 percent from 33.8 percent. ''The margins blow the doors off my estimates,'' said Boris Petersik, an analyst with Donaldson & Lufkin in Hong Kong, who rates TSMC as a ''top pick.'' TSMC produces chips to customer orders, known as 'foundry.' Chips are used in everything from personal computers and mobile phones to cars. Beneficiaries The surge in TSMC's profits suggests Applied Materials Inc. and chip-equipment manufacturers in the U.S., the Netherlands and Japan will see their sales rise. ''It's good news for equipment suppliers Applied Materials and ASM Lithography, as well as the Japanese,'' said Petersik. Last week, the Semiconductor Equipment Association of Japan said orders for Japanese chipmaking equipment totaled $552 million in February, the fourth month-on-month rise. That indicates demand for equipment is rebounding, after a trough year- on-year decline of 73 percent in October. TSMC is optimistic that earnings will continue to rise in the second quarter. ''Our utilization rate is very likely to surge to 90 percent, or even 95 percent,'' Chang said. ''We expect the gross margins to stay at the 40 percent level on rising demand and stable prices.'' Investors seem to agree. TSMC stocks soared 63 percent since early January on expectations that global chip demand is accelerating. ''What we see is that the chip industry is gaining momentum. TSMC will absolutely benefit from that,'' said William Cheng, who manages NT$2.5 billion for Fuh-Hwa Investment Trust Co. TSMC is Cheng's core holding, accounting for more than 8 percent of his portfolio. As of yesterday, TSMC was the most popular Taiwanese stock among overseas investors. That translated into 1.03 billion shares held by foreigners, or about a sixth of TSMC's total outstanding shares. TSMC rose 0.4 percent today to NT$116.50, near an all-time closing high. Blight To be sure, slowing PC demand growth worldwide may mean trouble for TSMC. ''We're bullish about the second quarter,'' Chang said. ''However, the earnings performance of U.S. computer-related companies were not that great,'' which may slow down TSMC's growth. Compaq Computer Corp.'s Chief Executive Eckhard Pfeiffer and Chief Financial Officer Earl Mason resigned this week after the company warned first-quarter earnings will be only half as much as forecast because of slowing PC demand. Intel Corp. also blamed lower-than-expected first-quarter sales on a dip in demand for PCs. (All figures in millions of New Taiwan dollars, rounded, except earnings per share) 1Q99 1Q98 Y-o-Y% 4Q98 Q-o-Q% change change Net earnings 4,090 6,947 -41.1% 2,524 62.0% EPS 0.68 1.15 -41.1% 0.42 62.0% Operating profit 4,873 6,709 -27.4% 2,893 68.5% Sales 12,501 15,736 -20.6% 11,633 7.5% Apr/20/1999 6:31 >>