Taiwan Semiconductor Manufacturing Company this week announced financial results for the second quarter of 2010. The firm reported record revenues and profits, which is an indicator that its customers expect demand for their products to uptick. The company's most advanced 40nm node brought the company 30% more revenue than in the previous quarter and the demand towards the process was growing more rapidly than the demand towards other nodes.
In the second quarter, demand for TSMC’s wafers continued to be strong, and wafer shipments in all major semiconductor market segments increased from their first quarter levels. Advanced process technologies (130nm and below) accounted for 72% of wafer revenues. Among the high-end production technologies, 40nm got the maximum actual boost: it not only grabbed additional 2% of TSMC's revenue share, but considering the increase of the company's revenue by 13.9% quarter-over-quarter, the output of wafers processed using 40nm technology increased by 30% sequentially.
At present ATI (graphics business entity of Advanced Micro Devices) and Nvidia are producing their leading-edge graphics chips at TSMC's 40nm node. Both suppliers of graphics processing units (GPUs) depend on yields and output of the world's largest contract maker of semiconductors; as a result, a 30% increase in sales of 40nm wafers is a good news for both suppliers.
Process Technologies as Percentage of TSMC's Revenue in Recent Quarters
TSMC this week announced consolidated revenue of NT$104.96 billion ($3.281 billion), net income of NT$40.28 billion ($1.259 billion), and diluted earnings per share of NT$1.55 (US$0.24 per ADS unit) for the second quarter ended June 30, 2010.
Year-over-year, second quarter revenue increased 41.4% while net income increased 64.8% and diluted EPS increased 65%. Compared to first quarter of 2010, second quarter results represent a 13.9% increase in revenue, and a 19.7% increase in both net income and diluted EPS. All figures were prepared in accordance with R.O.C. Gross margin for the quarter was 49.5%, operating margin was 38.6%, and net margin was 38.4%.
“Both macroeconomic forecast and booking trend indicate that third quarter business will continue to grow. Relative to the second quarter, the consumer and communication segments in the third quarter will increase while the computer segment will decline slightly. Based on our current business outlook, management expects overall performance for third quarter 2010 to be as follows," said Lora Ho, vice president and chief financial officer of TSMC.