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TSMC Q1 net profit up 6 percent

2012/04/26 19:59:20

Taipei, April 26 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, said its net profit for the first quarter of this year rose 6 percent from a quarter earlier on rising demand for mobile devices.

In the January-March period, TSMC posted NT$33.47 billion (US$1.13 billion) in net profit, up from NT$31.58 billion recorded a quarter earlier.

Earnings per share for the first quarter stood at NT$1.29, compared with NT$1.22 registered in the fourth quarter.

"Due to the fast growth of mobile computing devices, our customers' replenishing inventories and TSMC's leadership in technology and capacity, we have experienced strong orders in the last few months," TSMC Chief Financial Officer Lora Ho said in a statement.

On the back of rising demand, TSMC's sales for the first quarter totaled NT$105.51 billion, higher than the company's earlier estimated range between NT$103 billion and NT$105 billion.

TMSC's gross margin during the same period stood at 47.7 percent, also higher than the company's earlier expected range between 42.5 and 44.5 percent.

TSMC remains upbeat about the market outlook for the second quarter, expecting sales during the period will range between NT$126 billion and NT$128 billion, rising to a range between 19 and 21 percent from a quarter earlier, Ho said.

Second quarter sales are expected to hit a record high in the company's history, she said.

For the second quarter, Ho said the company's gross margin will be affected by the electricity rate hike scheduled for May 15 and a rising Taiwan dollar, but improving production efficiency will offset the impact.

She said the second quarter gross margin is expected to range between 47 and 49 percent, while the company's operating margin is likely to range between 34.5 and 36.5 percent, compared with 33.6 percent recorded in the first quarter.

TSMC Chairman Morris Chang said his company has decided to raise its capital expenditure for 2012 to a range of US$8 billion-US$8.5 billion (NT$236 billion-NT$250 billion), up more than 33 percent from the previously planned US$6 billion.

Chang said the hike in capex is to meet rising demand from its customers, in particular for chips on the advanced 28 nanometer technology process, while the company needs funds to develop the more sophisticated 20 nm process.

He said in the revised capex plan, TSMC will assign US$1.3 billion to US$1.5 billion to expand the 28 nm process capacity, while using US$70 million for 20 nm process development, US$200 million for flash memory chip development and US$100 million in the IC testing and packaging area.

Chang said due to the efforts in 28 nm process development, chips on the particular technology are expected to account for more than 20 percent of TSMC's total sales in the fourth quarter, up from 5 percent recorded in the first quarter.

(By Jackson Chang and Frances Huang)