LONDON – A shortage of wafers for customers at the 28-nm process node has been no barrier to sharply increased profits at leading foundry Taiwan Semiconductor Manufacturing Co. Ltd. (Hsinchu, Taiwan). TSMC said it plans to double shipments of 28-nm in the next quarter. The company expects to expand sales revenue by about 7 percent sequentially in 3Q12.
TSMC made a net profit of NT$41.81 billion (about $1.39 billion) on sales revenue of NT$128.06 billion (about $4.27 billion) in the second quarter of 2012. The profit was up 16.3 percent on 2Q11 and the sales revenue was up 15.9 percent. Sequentially the profit jumped up by 24.9 percent while revenue was up 21.4 percent on the first quarter.
Although the 28-nm production ramp has been slower than some customers would have liked leading to them to discuss engagements with other foundries, TSMC is still the major pure-play foundry supplier of the node and it remains a minority interest at the leading edge. The roll out, improvement in yields and so on, are on track the company asserts.
The 28-nm process technology accounted for 7 percent of TSMC's wafer revenues in 2Q11, while 40-nm manufacturing accounted for 28 percent of revenues and 65-nm was 26 percent of revenues. Classing these three nodes as "advanced technologies" TSMC said that advanced technologies accounted for 61 percent of wafer revenues in 2Q12.
"Due to continuing strong demand for our 28-nanometer technology, we expect to double the shipments of 28-nm in the third quarter. This increase in 28-nm business will account for more than 80 percent of revenue growth in the third quarter," said Lora Ho, CFO of TSMC, in a statement.
The company said it expects 3Q12 revenue to be in the range NT$136 billion to NT$138 billion (about $4.54 billion to $4.60 billion).
Agree, TSMC is the only player in 28nm right now. Companies like qualcomm has to bring up other foundries so that 28nm can be outsourced other alternative than TSMC. What a reality fabless companies are facing!!
The title for this article does not make sense...
Profit soars despite shortage??!!
Fabs profit margin is directly proportional to fab utilization. If they have shortages, means they are running high (near 100%) utilization and can't keep up demand. High utilization will translate to high profit margin.
Being an industry leader has its benefits. TSMC has the scale no-one else has to make to the most advanced logic nodes. Fabless companies have to go to TSMC. GlobalFoundries is still heavily subsidized by petrodollars. Hopefully GF can catch up to TSMC in scale and technology so they can really compete.
Many had hope in 2009/2010 when petrodollars created a merger of AMD(Global) and Chartered to be an alternative to TSMC. But so far that was a pipe dream and situation is getting worse. No one is having that hope anymore. Hope Samsung and UMC can come back to that position.
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