HSINCHU, Taiwan --Silicon foundry giant Taiwan Semiconductor Manufacturing Company Ltd. here today reported its capacity utilization rate dropped to 41% in the third quarter, down slightly from 44% in Q2 but less the decline expected in July.
TSMC also reported net sales grew sequentially by 2% to NT$26.94 billion ($792 million) in the third quarter from NT$26.30 billion in the second quarter. The world's largest silicon foundry company said its net income for the third quarter was NT$1.24 billion ($36 million), an improvement from NT$312 million in Q2.
Compared to Q3 of 2000, TSMC's revenues were down 43% and its net income was 94% lower than profits in the period last year. In Q3 last year, TSMC's capacity utilization was at 107%, prior to the start of the industry downturn.
TSMC said its capital spending plans for 2001 remains at $2.2 billion with more than 50% of this year's budget going to 300-mm (12-inch) wafer fabs. The company said its total installed capacity managed by TSMC is expected to reach 4.38 million eight-inch (200-mm) equivalent wafers in 2001.
The foundry company said it is closely reviewing capital spending plans for 2002 and it now expects to significantly lower its expenditures next year in response to the weak market conditions. No figures were released, but some estimates show TSMC cutting capital spending by 25% next year to around $1.5 billion.
TSMC said it continues to believe its business bottomed out in the second quarter of 2001 with sequential growth continuing in the current fourth quarter. The company estimated that its revenues would grow sequentially by 15% from Q3 and it predicted that it would maintain profitability. IN fact, Q4 operating and net income profits are expected to double from the third quarter, said the company. Capacity utilization is expected to move up a few percentage points from the 41% mark recorded in the third quarter.
On Thursday, TSMC said it was planning long-term investments in Taiwan fabs, totaling NT$700 billion ($20.6 billion), including the resumption of Fab 14 in Tainan (see story). The 300-mm wafer fab in Tainan had been put on hold for a number of months this year while TSMC studied the impact ground vibration from a planned high-speed train that's scheduled to begin operation in 2005. But now TSMC said the train won't be a problem for its fabs in the southern Taiwan high-tech park.
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