Taiwan Semiconductor Manufacturing Company on Thursday released its financial results for the third quarter of 2012, which ended September 30, 2012. The company posted a healthy 10.4% sequential increase of revenue, but more importantly, it managed to boost output of chips produced using 28nm process technology by whopping 105% quarter-over-quarter. TSMC vowed to continue boosting 28nm output.
28nm Wafers Account for 13% of Total Wafer Revenue
“In the third quarter, [28nm node accounted for] 13% of our revenue. In the fourth quarter, it will be higher than 20% of our revenue. […] Next year, we expect [28nm to account for] 30% of our revenue. Yields have continued to improve and the gross margin of the 28nm will be in the low 40% in the fourth quarter. In 2013, it will be at corporate average (or 45% - 50% - X-bit labs),” said Morris Chang, chief executive officer of TSMC, during a conference call with financial analysts.
28nm process technology accounted for 13% of total wafer revenues, meeting TSMC's internal plans. 40nm accounted for 27% of total wafer revenues, and 65nm was 22%. The advanced technologies accounted for 62% of total wafer revenues.
Considering increased revenues of TSMC in Q3 2012, 13% of total wafer revenue represents NT$18.37 billion ($628.7 million), or a 105% increase from NT$8.962 billion ($306.73 million) in Q2 2012.
Unfortunately, TSMC did not reveal the number of 300mm wafers processed using 28nm manufacturing technology, but it is clear that it is significantly higher compared to 68 thousand wafers in the previous quarter. The company did say that all of its 28nm capacities were utilized during the quarter, an indication that the demand still exceeds supply. The split between the number of wafers processed using HKMG and non-HKMG versions of 28nm process technology was also not revealed. At present the company has around 250 tape-outs of 28nm designs.
TSMC Capacities and Revenues Continue to Grow
“As we continue adding capacity for 28nm, our total capacity has increased 5% to 3.8 million wafers in the third quarter. We expect 28nm [capacity] to be fully utilized. For the full year, our [300mm] capacity is expected to increase 21% in 2012 and total annual capacity for the company will increase 14% to reach 15 million [200mm] equivalent wafers,” said Lora Ho, chief financial officer of TSMC.
TSMC announced consolidated revenue of NT$141.38 billion ($4.8389 billion), net income of NT$49.30 billion ($1.687 billion), and diluted earnings per share of NT$1.90 (US$0.32 per ADR unit) for the third quarter ended September 30, 2012. Year-over-year, third quarter revenue increased 32.8% while both net income and diluted EPS increased 62.2%. Compared to second quarter of 2012, third quarter of 2012 results represent a 10.4% increase in revenue, and a 17.9% increase in both net income and diluted EPS. Gross margin for the quarter was 48.8%, operating margin was 37.2%, and net margin was 34.9%.
“Due to the strong demand for our advanced technologies, we have enjoyed a record quarter of both revenue and net income in the third quarter. However, we expect the IC supply chain to begin reducing inventories in the fourth quarter, which will affect the demand for our wafers,” said Lora Ho.
For the fourth quarter of 2012 TSMC expects revenue to be between NT$129 billion ($4.415 billion) and NT$131 billion ($4.483 billion), cross profit margin to be between 45% and 47% and operating profit margin to be between 33% and 35%.