TSMC’s Revenue for 40nm Chips Up Slightly Quarter-over-Quarter

TSMC’s Earnings Set Another Record in Q3 2010

by Anton Shilov
10/28/2010 | 04:18 PM

Taiwan Semiconductor Manufacturing Company on Thursday released its financial results for the third quarter of 2010. The company again managed to post record earnings and profits. Interestingly, but the firm’s revenue from its most advanced 40nm process technology was only up 13% from the previous quarter.

 

In the third quarter of 2010, demand for TSMC’s wafers continued to increase, and wafer shipments in all major semiconductor market segments, except computer, increased from their second quarter levels. The latter fact means that companies like Advanced Micro Devices and Nvidia Corp. are shifting orders from older manufacturing processes to newer ones.

However, 40nm production capacities may be not enough for the two. Given the fact that TSMC’s revenue for 40nm chips increased its share to 17% of the company’s earnings, which means that actual revenue from 40nm process tech increased by 13.6% in Q3 2010. In the meantime, in the third quarter Nvidia released several new mainstream and performance-mainstream graphics processors built using 40nm process tech, whereas its rival ATI started to manufacture its new performance-mainstream graphics processing unit.

Advanced process technologies (130nm and below) accounted for 72% of wafer revenues, 90nm process technology accounted for 14% of wafer revenues, 65nm for 29%, and 40-nanometer exceeded 17% of total wafer sales.

Process Technologies as Percentage of TSMC's Revenue in Recent Quarters

 

Q1 2009

Q2 2009

Q3 2009

Q4 2009 

Q1 2010

Q2 2010

Q3 2010

150nm+

35%

35%

33%

30%

29%

28%

28%

130nm/110nm

16.66%

13%

14%

15%

13%

13%

14%

90nm/80nm

25%

23%

18%

16%

17%

16%

12%

65nm/55nm

23%

28%

31%

30%

27%

27%

29%

40nm

0.33%

1%

4%

9%

14%

16%

17%

TSMC’s consolidated revenue was NT$112.25 billion ($3.6662 billion), net income was NT$46.94 billion ($1.5331 billion), and diluted earnings per share of NT$1.81 (US$0.28 per ADR unit) for the third quarter ended September 30, 2010. Year-over-year, third quarter revenue increased 24.8% while net income increased 53.6% and diluted EPS increased 54%. Compared to second quarter of 2010, third quarter results represent a 6.9% increase in revenue, an increase of 16.5% both in net income and in diluted EPS.

“For the fourth quarter, we expect the demand from communication related applications to continue to grow while computer and consumer related applications will decline. Based on our current business outlook and exchange rate assumption, management expects overall performance for fourth quarter 2010 to be as follows,” said Lora Ho, senior vice president and chief financial officer of TSMC.