TSMC 4Q revenue drops 31.2 percent

HSINCHU, TAIWAN: TSMC today announced consolidated revenue of NT$64.56 billion, net income of NT$12.45 billion, and diluted earnings per share of NT$0.48 (US$0.07 per ADS unit) for the fourth quarter ended December 31, 2008.

Year-over-year, fourth quarter revenue decreased 31.2 percent while net income and diluted EPS decreased 63.9 percent and 62.3 percent, respectively. Compared to third quarter of 2008, fourth quarter results represent a 30.6 percent decrease in revenue, a decrease of 59.3 percent in net income, and a decrease of 59 percent in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

Triggered by a deepening economic recession worldwide and customers’ inventory adjustment, fourth quarter saw a sharp decline in the demand for semiconductors across all applications. Gross margin for the quarter was 31.3 percent, operating margin was 18.6 percent, and net margin was 19.3 percent.

Advanced process technologies (0.13-micron and below) accounted for 65 percent of wafer revenues with 90-nanometer process technology accounting for 21 percent and 65-nanometer reaching 27 percent of total wafer sales.

“The global economic recession continues to worsen. Fourth quarter end-market sell-through was much below the already conservative expectations, and consumer demand remains very weak. This has led to a rising DOI for our customers, who continue to pare their inventories aggressively, resulting in a further significant cut back of wafer demand,” said Lora Ho, VP and Chief Financial Officer of TSMC. “Based on our current business outlook, management expects overall performance for first quarter 2009 to be as follows”:

* Revenue is expected to be between NT$32 billion and NT$35 billion;

* Gross profit margin is expected to be between 1 percent and 5 percent;

* Operating profit margin is expected to be between -19 percent and -15 percent.