HSINCHU, Taiwan, Oct. 30 /Xinhua-PRNewswire-FirstCall/ -- TSMC (TAIEX:
2330; NYSE: TSM) today announced consolidated revenue of NT$92.98 billion, net
income of NT$30.57 billion, and diluted earnings per share of NT$1.18 (US$0.19
per ADS unit) for the third quarter ended September 30, 2008.
Year-over-year, third quarter revenue increased 4.5% while net income and
diluted EPS increased 0.7% and 4.9%, respectively. On a sequential basis,
third quarter results represent a 5.5% increase in revenue, an increase of
6.3% in net income, and an increase of 7.5% in diluted EPS. All figures were
prepared in accordance with R.O.C. GAAP on a consolidated basis.
Third quarter business saw an improvement from the previous quarter with
demand grew across all major semiconductor applications, although business
turned weak during the quarter. Third quarter gross margin was 46.3%,
operating margin was 35.4%, and net margin was 32.9%.
Advanced process technologies (0.13-micron and below) continued to grow
and accounted for 66% of wafer revenues with 90-nanometer process technology
accounting for 26% and 65-nanometer reaching 25% of total wafer sales.
'With global financial markets going through unprecedented turmoil and
world economy in a high state of uncertainty, most our customers are
aggressively paring their inventories and have thus reduced significantly
their wafer demand,' said Lora Ho, VP and Chief Financial Officer of TSMC.
'Based on our current business outlook, management expects overall performance
for fourth quarter 2008 to be as follows':
-- Revenue is expected to be between NT$69 billion and NT$71 billion;
-- Gross profit margin is expected to be between 34% and 36%;
-- Operating profit margin is expected to be between 21% and 23%.
Conference Call & Webcast Notice:
TSMC's quarterly review conference call will be held at 8 a.m. Eastern
Time (8 p.m. Taiwan Time) on Thursday, October 30, 2008. The conference call
will also be webcast live on the Internet. Investors wishing to access the
live webcast should visit TSMC's web site at http://www.tsmc.com at least 15
minutes prior to the broadcast. Instructions will be provided on the web site
to facilitate the download and installation of necessary audio applications.
Investors without Internet access may listen to the conference call, in
listen-only mode, by dialing 1-617-213-8891 in the U.S., 852-3002-1672 in Hong
Kong, 65-6823-2164 in Singapore, and 44-207-365-8426 in the U.K. (Password:
TSMC). An archived version of the webcast will be available on TSMC's web
site for six months following the Company's quarterly review conference call
and webcast.
Profile
TSMC (TAIEX: 2330; NYSE: TSM) is the world's largest dedicated
semiconductor foundry, providing the industry's leading process technology and
the foundry's largest portfolio of process-proven libraries, IP, design tools
and reference flows. The Company's total managed capacity in 2008 is to exceed
nine million (8-inch equivalent) wafers, including capacity from two advanced
12-inch Gigafabs, four eight-inch fabs, one six-inch fab, as well as TSMC's
wholly owned subsidiaries, WaferTech and TSMC (Shanghai), and its joint
venture fab, SSMC. TSMC is the first foundry to provide 40nm production
capabilities. Its corporate headquarters are in Hsinchu, Taiwan. For more
information about TSMC please see http://www.tsmc.com .
-- Management Report and Tables Follow --
TSMC 3Q08 Quarterly Management Report October 30, 2008
Topics in This Report
-- Revenue Analysis
-- Profit & Expense Analysis
-- Financial Condition Review
-- Cash Flow
-- CapEx & Capacity
-- Recap of Recent Important Events & Announcements
Operating Results Review:
Summary:
(Amounts are on consolidated basis
and are in NT billions except
otherwise noted) 3Q08 2Q08 3Q07 QoQ YoY
EPS (NT$ per common share) 1.18 1.10 1.13 7.5% 4.9%
(US$ per ADR unit) 0.19 0.18 0.17 -- --
Consolidated Net Sales 92.98 88.14 88.96 5.5% 4.5%
Gross Profit 43.09 40.22 40.72 7.1% 5.8%
Gross Margin 46.3% 45.6% 45.8% -- --
Operating Expense (10.18) (9.85) (8.37) 3.3% 21.6%
Operating Income 32.92 30.37 32.35 8.4% 1.7%
Operating Margin 35.4% 34.5% 36.4% -- --
Non-Operating Items 1.51 2.00 1.87 (24.5%) (18.9%)
Net Income 30.57 28.77 30.37 6.3% 0.7%
Net Profit Margin 32.9% 32.6% 34.1% -- --
Wafer Shipment
(kpcs 8 inch-equiv.) 2,411 2,329 2,226 3.5% 8.3%
Note: Total outstanding shares were 25,625mn units at 9/30/08
Remarks:
The diluted earnings per share in 3Q08 were NT$1.18, representing an
increase of 4.9% over the same period last year and an increase of 7.5% from
the previous quarter. The consolidated operating results of 3Q08 are
summarized below:
Net sales in the third quarter were NT$93.0 billion, up 4.5% from NT$89.0
billion in 3Q07 and up 5.5% from NT$88.1 billion in 2Q08.
Gross profit for the quarter was NT$43.1 billion with gross margin of
46.3%, 0.7 percentage point higher than the 45.6% gross margin in 2Q08, mainly
due to a favorable change of the exchange rate.
Operating expenses, including expenses accrued for employee profit
sharing, were NT$10.2 billion or 10.9% of net sales. The combined result from
non-operating income and long-term investments was a gain of NT$1.5 billion.
Consolidated net income attributable to shareholders of the parent
company, including an accrual of employee profit sharing, was NT$30.6 billion,
slightly up 0.7% from a year ago level and up 6.3% from the previous quarter.
Net profit margin was 32.9% for 3Q08.
I. Revenue Analysis:
In-line with our guidance, the third quarter 2008 revenue reached NT$93.0
billion. 3Q08 business saw a continued improvement and revenue benefited from
a 2.4% depreciation in the NT dollar against the US dollar. Demand grew
across the board during the quarter. On a quarter-over-quarter basis,
revenues from computer, communication, and consumer applications increased 9%,
7% and 1%, respectively.
As a result of continued strong ramp for our 65nm technology, revenue from
65nm reached 25% of total wafer sales during the quarter, up from 18% in the
previous quarter. Meanwhile, revenue from 90nm declined slightly to 26% of
total wafer sales. Overall, revenues from advanced technologies (0.13-micron
and below) accounted for 66% of total wafer sales, up from 63% in 2Q08.
Revenues from IDM customers accounted for 30% of total wafer sales in
3Q08, slightly up from 2Q08.
From a geographic perspective, revenues from customers based in North
America accounted for 74% of total wafer sales. Meanwhile, sales from
customers in Asia Pacific, Europe and Japan accounted for 13%, 10% and 3% of
wafer sales, respectively.
I. Wafer Sales Analysis
By Application 3Q08 2Q08 3Q07
Computer 33% 31% 32%
Communication 41% 41% 42%
Consumer 20% 21% 17%
Industrial/Others 6% 7% 9%
By Technology 3Q08 2Q08 3Q07
65nm and below 25% 18% 7%
90nm 26% 28% 27%
0.11/0.13um 15% 17% 22%
0.15/0.18um 22% 23% 28%
0.25/0.35um 9% 10% 11%
0.50um+ 3% 4% 5%
By Customer Type 3Q08 2Q08 3Q07
Fabless/System 70% 71% 66%
IDM 30% 29% 34%
By Geography 3Q08 2Q08 3Q07
North America 74% 73% 74%
Asia Pacific 13% 13% 13%
Europe 10% 11% 10%
Japan 3% 3% 3%
Gross Profit Analysis:
Gross margin in 3Q08 was 46.3%, up 0.7 percentage point from the previous
quarter, mainly reflecting a favorable change of the exchange rate.
II - 1. Gross Profit Analysis
(In NT billions) 3Q08 2Q08 3Q07
COGS 49.89 47.92 48.23
Depreciation 19.06 18.23 18.20
Other MFG Cost 30.83 29.69 30.03
Gross Profit 43.09 40.22 40.72
Gross Margin 46.3% 45.6% 45.8%
Operating Expenses:
Total operating expenses for 3Q08 increased by 3.3% sequentially to reach
NT$10.2 billion, or 10.9% of net sales, compared with 11.1% of net sales in
the previous quarter.
Research and development expenditures increased by NT$577 million quarter-
over-quarter, mainly due to 32nm technology development and 45nm technology
transfer.
SG&A expenses decreased by NT$248 million from the previous quarter,
primarily due to less spending in this quarter for the ramp-up of Fab 14 Phase
3 and for the promotion of world-wide technology marketing activities.
II - 2. Operating Expenses
(In NT billions) 3Q08 2Q08 3Q07
Total Operating Exp. 10.18 9.85 8.37
SG&A 4.20 4.45 3.68
Research & Development 5.98 5.40 4.69
Total Operating Exp. as a % of Sales 10.9% 11.1% 9.4%
Non-Operating Items:
Combined result from non-operating income and long-term investments income
was a gain of NT$1.5 billion for the third quarter 2008.
Non-operating income was NT$1.3 billion, down from NT$1.7 billion in 2Q08,
primarily due to an increase of valuation losses on financial instruments,
less gains from disposal of financial assets, and recognition of losses from
idle tools, but partially offset by less impairment losses of financial
assets.
Net investment income decreased by NT$94 million in the quarter to NT$185
million.
II - 3. Non-Operating Items
(In NT billions) 3Q08 2Q08 3Q07
Non-Operating Inc./(Exp.) 1.33 1.72 1.09
Net Interest Income/(Exp.) 1.15 1.24 1.10
Other Non-Operating 0.18 0.48 (0.01)
L-T Investments 0.18 0.28 0.78
SSMC 0.15 0.30 0.41
Others 0.03 (0.02) 0.37
Total Non-Operating Items 1.51 2.00 1.87
The Impact of Employee Profit Sharing:
Total impact from employee profit sharing expensing (PSE) on gross margin
in 3Q08 was 2.6 percentage points, flat comparing to the previous quarter.
Similarly, total PSE impact on operating margin was 4.9 percentage points
in 3Q08.
II - 4. PSE Impact
3Q08 2Q08 3Q07
Gross Margin w/ PSE 46.3% 45.6% 41.3%
Gross Margin w/o PSE 48.9% 48.2% 45.8%
PSE Impact -2.6% -2.6% -4.5%
Operating Margin w/ PSE 35.4% 34.5% 27.7%
Operating Margin w/o PSE 40.3% 39.4% 36.4%
PSE Impact -4.9% -4.9% -8.7%
* PSE: Profit Sharing Expenses
** 2007 PSE impact is estimated using the 6/12/2008 closing share price
adjusted for dividends
III. Financial Condition Review
Liquidity Analysis:
At the end of 3Q08, total current assets decreased by NT$ 67.4 billion to
NT$232.3 billion, mainly due to the decrease of NT$65.8 billion in cash and
marketable securities as we paid cash dividend of NT$76.8 billion in this
quarter.
Total current liabilities decreased by NT$84.8 billion in this quarter,
primarily due to the payment of cash dividends accrued in the previous
quarter.
Net working capital was NT$170.2 billion and current ratio increased to
3.7 at the end of this quarter.
III - 1.
