TSMC ups capex, outlook mixed
1/27/2011 10:58 AM EST
SAN JOSE, Calif. - Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has raised its capital spending for 2011 amid mixed results for the quarter.
TSMC's outlook is also mixed. But as expected, TSMC expects 2011 capital expenditures to be about $7.8 billion in 2011. TSMC's original capital spending budget was about $6 billion for this year, according to analysts.
The silicon foundry giant raised its capital spending in response to Globalfoundries Inc., which is doubling is capex for the year. In the foundry sector, Samsung Electronics Co. Ltd. is also increasing its spending for 2011.
TSMC also announced consolidated revenue of NT$110.14 billion ($3.786 billion) and net income of NT$40.72 billion ($1.4 billion) for the fourth quarter ended Dec. 31, 2010.
Year-over-year, fourth quarter revenue increased 19.6 pecent while net income increased 24.7 percent. Compared to third quarter of 2010, fourth quarter results represent a 1.9 percent decrease in revenue and a 13.2 percent decrease in net income.
In the fourth quarter, demand for TSMC’s wafers remained strong, with increases in wafer shipments in communication segment offsetting decreases in computer and consumer segments.
40-nm process technology accounted for 21 percent of total wafer revenues, while 65-nm accounted for 31 percent. These advanced technologies exceeded 50 percent of total wafer sales for the first time and accounted for 52 percent of total revenues.
“For the first quarter of 2011, we expect the demand to be stronger than seasonal,” said Lora Ho, senior vice present and chief financial officer of TSMC, in a statement.
Revenue is expected to be between NT$105 billion ($3.610 billion) and NT$107 billion ($3.678 billion).
Foundry chipmaker United Microelectronics Corp. (UMC) this week posted steady results in the fourth quarter, but the foundry vendor sees a slowdown in the first quarter of 2011 with both wafer shipments and average selling price (ASP) per wafer falling.
For 2011 foundry chipmaker United Microelectronics Corp. (UMC) said it is planning to maintain its annual capital expenditure budget at $1.8 billion, in line with capex spending in 2010.