PORTLAND, Ore. -- An investment banking firm has raised its forecast for Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) in spite of the company's cautious and worrisome outlook for the IC industry.
TSMC's executive management projects that the IC industry will only grow 7 percent in 2003 and 11 percent in 2004, according to a new report from Pacific Crest Securities Inc. today (July 25). That's far below the forecasts from several major research houses, which are looking at 20-plus percent growth rates in 2004 over 2003.
But still, Michael McConnell, an analyst with Pacific Crest Securities in Portland, raised his estimates for TSMC in both 2003 and 2004, based on the company's performance for the second quarter. On Thursday (July 24), the silicon foundry giant said sales and profits hit two and a half year highs in the second quarter and the company expects the "fine performance" to continue this quarter as the beginnings of a tech recovery take deeper root ( see July 24 story ).
As a result, McConnell in the report projects that TSMC will earn $0.33 a share on sales of $5.728 billion in calendar 2003 and $0.42 a share on revenue of $7.167 billion in 2004.
The Hsinchu-based company was originally projected to earn $0.31 a share on sales of $5.652 billion in 2003 and $0.42 on revenue of $7.083 billion in 2004, according to McConnell.
On the other hand, TSMC remains cautious about the future. The company is projected to show "high single-digit revenue growth" in the third quarter of 2003 over the second quarter, according to Pacific Crest Securities.
Wafer shipments will only grow 5 percent to 9 percent sequentially, the report said. "Management is now estimating 7 percent and 11 percent revenue growth for the semiconductor industry in 2003 and 2004, respectively, and is continuing to take a cautious approach to its capital spending plan," according to the report.
TSMC's capital spending plan is slated is $1.25 billion in 2003. Before TSMC increases its capital spending plans and fills its empty Fab 14 plant, the company's 300-mm Fab 12 factory must exceed a fab-utilization rate of 80 percent, the report said. At present, Fab 12 is running 17,000 wafers a month and is at 50 percent capacity, it added.