LONDON – Taiwan Semiconductor Manufacturing Co. Ltd., the world's largest chipmaking foundry, announced a net profit of NT$31.58 billion (about $1.05 billion) on consolidated revenue of NT$104.71 billion (about $3.5 billion), for the fourth quarter of 2011. ended Dec. 31, 2011.
Year-over-year, fourth quarter revenue decreased 4.9 percent while net income decreased 22.5 percent, TSMC (Hsinchu, Taiwan) said. Compared to third quarter of 2011, fourth quarter of 2011 results represent a 1.7 percent decrease in revenue, and a 3.9 percent increase in net income.
The company said it expects to spend about $6 billion on capital expenditure in 2012, down about 18 percent from the 2011 capex of $7.3 billion.
The company also gave a breakdown of how the various manufacturing process nodes contribute to sales. The leading 28-nm node accounted for 2 percent of revenues in Q4; 40-nm was 27 percent and 65-nm accounted for 30 percent. The 65-nm and more advance nodes therefore accounted for 59 percent of wafer revenues, TSMC said. Larger, trailing edge geometries accounted for 41 percent of wafer revenues.
"Although the outlook of the global economy remains uncertain, we expect the demand for our wafers to be stronger than seasonal for the first quarter," said Lora Ho, CFO at TSMC, in a statement.
The company predicted 1Q12 revenues of between NT$103 billion and NT$105 billion, which is more or less flat with 4Q11.
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Trailing edge geometries have always accounted for the bulk of wafer revenues. It's the classic technology adoption life cycle curve. I do think that the early adopters may be getting smaller. You need a very high volume product to afford to go out early in the new technology nodes. But because the volumes are high, from the foundry side of things,it may make up for the fewer number of early adopters.
Not a cheerful message to start the new year!
@Peter Clarke: what is TSMC's plausible explanation for the margin erosion? (...fourth quarter revenue decreased 4.9 percent while net income decreased 22.5 percent). I did not see any major TSMC announcements on Capex investments in Q4 2011 so I am a bit surprised about the net income drop.
What is also noteworthy is their statement on "...trailing edge geometries accounted for 41 percent of wafer revenues..." seems to me that many TSMC clients are postponing migration to advanced nodes.
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