SAN JOSE, Calif. -- Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) posted strong results in the second quarter and raised its capital spending for 2009.
The silicon foundry giant also addressed its 40-nm yield issues, which are improving to a large degree.
TSMC reported consolidated revenue of NT$74.21 billion ($2.24 billion) and net income of NT$24.44 billion ($738 million) in the quarter. Year-over-year, second quarter revenue decreased 15.8 percent, while net income decreased 15 percent.
Compared to first quarter of 2009, second quarter results represent an 87.9 percent increase in revenue, and an increase of 1467.9 percent in net income.
Revenue from 45/40-nm exceeded 1 percent of total wafer sales in 2Q09, with wafer shipments tripling those of 1Q. Meanwhile, revenue from 65-nm and 90-nm were 28 percent and 23 percent of total wafer sales, respectively.
As reported, TSMC has experienced low 40-nm yields. ''Managment acknowledged yield issues at 40-nm node, including those due to adoption of immersion and extreme low-k material but the main reason was suggested to be problems in the gate region,'' said C.J. Muse, an analyst with Barclays Capital.
''Management does expect defect density reduction pace to grow through September and we estimate current yields are around 60 percent, 2X the number in April/May,'' Muse said in a report.
For year 2009, total capital expenditures for TSMC is expected to be around $2.3 billion, compared with $1.9 billion spent in 2008. Originally, TSMC was supposed to spend $1.5 billion.
"Due to improved demand outlook for 2010 and a more aggressive technology strategy, TSMC 2009 capital expenditure is expected to be above both the 2008 expenditure of $1.9 billion and the previously guided $1.5 billion, and is expected to be around $2.3 billion," said Lora Ho, vice president and chief financial officer of TSMC, in a statement.
For Q3, Revenue is expected to be between NT$88 billion and NT$90 billion.