TSMC upgrades Q3 guidance, sales up y/y

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 9/10/2007

Hsinchu, Taiwan-based semiconductor foundry giant Taiwan Semiconductor Manufacturing Co. (TSMC) today announced its unconsolidated net sales for August were $850.6 million (29.2 billion New Taiwanese dollars), 1.5 percent higher than July and 8.1 percent higher than August 2006.

Revenues for January through August were $5.9 billion (194.2 billion TWD), a decrease of 8.9 percent compared to the same period in 2006.

On a consolidated basis, net sales for August were $905.3 million (30 billion TWD), up 1.8 percent from July and 10 percent higher than August 2006. Consolidated revenues for January through August totaled $6 billion (199.3 billion TWD), a decrease of 7.4 percent compared to the same period in 2006.

On a positive noted, due to some customers’ requested pull-in, TSMC’s Q3 revenue is expected to be better than the guidance given on July 26, and is now estimated to be between $2.6 to $2.7 billion (87 and 89 billion TWD) and both gross profit margin and operating profit margin also expected to be better than the high end of the previous guidance by less than one percentage point.

Lehman Brothers Semiconductor Research’s Abraham Leu said the results highlight constructive Q3 demand trends for TSMC.

“The new guidance of represents 16 to 19 percent quarter-over-quarter growth, compared to the previous guidance of 13 to 16 percent, which is in line with our expectation of a better industry picture post back-to-school,” Leu said in a report.

“From our channel check, we believe TSMC’s Q3 revenue could reach 19 percent quarter-over-quarter growth, the high-end of guidance - again, the strength is mostly coming from PC and networking related business. Since the increase is mostly on the high-end node, margin guidance also edged up a little, by less than 1 percentage point. We still expect the company to post 5 percent quarter-over-quarter growth in Q4, much lower than the seasonal 10 to 15 percent generally seen,” he added.

Lehman maintained its “Equal weight / Neutral” rating on TSMC’s stock; however, the news implies the likely overweighting of PC and networking related stocks, the firm concluded.

Rival foundry United Microelectronics Corp. (UMC) released its August revenue of $314.8 million (10.4 billion TWD), up 10.8 percent year-over-year. Revenue for January through August was $2.1 billion (68.6 billion TWD), down 0.21 percent from the same time period last year.