Customers of Taiwan Semiconductor Manufacturing Company (TSMC) continued to rather aggressively migrate to newer process technology in the third quarter of 2009, the world’s largest contract maker of semiconductors revealed. It is noteworthy that TSMC’s revenue from 40nm wafers quadrupled in the third quarter and is now around 4%.
TSMC said that as demand outlook continued to improve, third quarter saw a solid growth in the demand for semiconductors across all major applications. Advanced process technologies (130nm and below) accounted for 67% of wafer revenues: 90nm process technology accounted for 18% of wafer revenues, 65nm for 31%, and 40nm exceeded 4% of total wafer sales (up from 1% in Q2 and up from 0.33% in Q1).
Potentially, substantial increase of 40nm wafer shipments means significant boost of 40nm chip supplies. As a result, graphics processing units that are made using 40nm fabrication process will gradually gain market share in calendar Q4 2009. Moreover, as ATI, graphics business unit of Advanced Micro Devices, and Nvidia Corp. ramp up their 40nm GPUs production at TSMC, the most advanced process technology will represent even higher portion of the chipmaker’s sales.
“Due to stronger demand for 40nm and 65nm technologies, TSMC 2009 capital expenditure is further raised and is expected to be around US$2.7 billion,” said Lora Ho, chief financial officer of TSMC.
Process Technologies as Percentage of TSMC's Revenue in 2009
TSMC late on Wednesday announced consolidated revenue of NT$89.94 billion ($2.765 billion), net income of NT$30.55 billion ($939.277 million), and diluted earnings per share of NT$1.18 (US$0.18 per ADS unit) for the third quarter ended September 30, 2009. Gross margin for the quarter was 47.7%, operating margin was 35.6%, and net margin was 34%.
Year-over-year, third quarter revenue decreased 3.3% while net income decreased 0.1% and diluted EPS increased 0.3%. Compared to second quarter of 2009, third quarter results represent a 21.2% increase in revenue, an increase of 25% in net income, and an increase of 24.8% in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.
“For the fourth quarter, we expect the demand from computer related applications to grow strongly while communication related applications will take a pause after two consecutive quarters’ strong momentum, and consumer applications will decline following their seasonal pattern,” added Ms. Ho.
For Q4 2009 TSMC expects revenue between NT$90 billion ($2.767 billion) and NT$92 billion ($2.828 billion) and operating profit margin is expected to be between 35.5% and 37%.