News & Analysis
Fourth quarter forecast takes shine off TSMC's Q3 results
Peter Clarke
10/26/2004 6:34 AM EDT
Sales were up 27.1 percent year-on-year and up 7.5 percent sequentially. Similarly net income was up 84.1 percent year-on-year and 19.3 percent sequentially, but the luster was taken off the third quarter results by the fourth quarter forecast embedded in the commentary on the third quarter.
The 7.5 percent increase in third quarter revenue mainly resulted from a 4.0 percent increase in wafer shipments and a 1.4 percent increase in wafer average selling price (ASP), TSMC said. This was further helped by a change of 1.8 percent in the value of the local currency against the US dollar, the company reported.
Revenues from manufacturing process technologies of 130-nanometer critical dimensions and below reached 30 percent of total wafer sales.
Despite several announcements over the preceding weeks that warned of a drop in utilization expected in the fourth quarter (see September 23 story) TSMC took analysts by surprise when it said it expected to see a capacity utilization of 85 percent in the fourth quarter, down from a capacity utilization of 103 percent in the third quarter and 106 percent in the second quarter of 2004.
"Building upon five consecutive quarters of strong financial performance, TSMC has delivered another set of record-breaking financial results for both the top-line and the bottom-line," said Lora Ho, chief financial officer of TSMC, in a statement. "However, there has been some near-term softening in customer demand," Ho added.
Ho said that TSMC expects wafer shipments to decrease by a single digit percentage point while ASPs remain flat in the fourth quarter. She also disclosed that the overall manufacturing capacity utilization rate would be in the "mid-80s percentage level" although no explanation was given of what would give rise to a 20 percent drop in manufacturing capacity utilization.
