Date: 30/07/2009

TSMC springing back to better days of semiconductor manufacturing

Semiconductor industry is no more down, TSMC 2nd quarter 2009 revenues and profit figures speak only the growth but a cautious one. TSMC has reported a quarterly revenue of NT$74.21 billion, net income of NT$24.44 billion, and diluted earnings per share of NT$0.94 (US$0.14 per ADS unit) for the second quarter ended June 30, 2009. Compared to its previous quarter revenue of NT$39.5 billion, 2nd quarter 09 revenues have grown by 87.8% and registered extremely impressive rise in net-income by 1467.9%. It's a marvelous recovery. 2nd half of 2009 can outperform compared to previous year.

TSMC is now churning out advanced semiconductor devices such as FPGA, wireless SoC devices, mobile phone chips, and graphic processors. TSMC reported growth in all application areas. Advanced process technologies (0.13-micron and below) accounted for 65% of semiconductor wafer revenues. 90-nanometer process technology accounted for 23% of wafer revenues, 65-nanometer 28%, and 45/40-nanometer, with wafer shipments tripling those of 1Q, exceeded 1% of total wafer sales.

Intel is engaging with TSMC to utilize TSMC fab services for it's future products (next genre of ATOM processors) in embedded computer line. Partnership is a good strategy for both of these top ranked semiconductor companies to compete with AMD. AMD's fab spin-off called Global Foundries is direct competitor for TSMC. Global Foundries is already got its first customer ST Microelectronics (other than AMD). Not only Intel and TSMC, every other leading semiconductor companies (fab, fables, merchant manufacturer, IP vendor, chip design software vendor) are allying to share technologies.

Along with TSMC, the other leading fabs United Microelectronics Corp (UMC) and Semiconductor Manufacturing International Corporation (SMIC) and Chartered Semiconductor have also posted significant increase in sale revenue in 2Q 09 compared to 1Q09.

For a veteran semiconductor-marketing expert, this recovery is no more a surprise. Semiconductor market is used to this type of cyclical growth and fall. Optimistic veteran in semiconductor marketing knows, selling silicon chips is risky but is highly profitable.