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Chip foundries post positive Q2 gains

Higher shipments and prices

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TSMC, the world's largest chip foundry, saw revenues reach record levels during is second fiscal quarter. Arch-rival UMC and fellow Far Eastern Foundry Chartered Semiconductor also posted big year-on-year and sequential gains.

TSMC's Q2 sales came to TWD64.87bn ($1.9bn), up 12.8 per cent on Q1 and 30 per cent on Q2 2003. Net income for the period reached TWD23.41bn ($686m) - TWD1 per share ($0.15 per ADS unit) - up 24.6 per cent sequentially and 100 per cent on the year-ago quarter.

Q2's gross margin jumped to 43.4per cent from 39.5 per cent in the previous quarter. Net margin for the quarter rose to 36.1 per cent from 32.7 per cent in the previous quarter.

UMC, meanwhile, saw Q2 sales reach TWD29.18bn ($864m), up 15.2 per cent on Q1's TWD25.33bn ($750m) and 34.4 per cent on Q2 2003's TWD21.71bn ($643m). Income totalled TWD12.7bn ($372m), up 84.2 per cent sequentially and 372.7 per cent year on year. That amounts to TWD0.83 per share ($0.12 per ADS unit).

Chartered experienced a similar growth pattern, with Q2 sales up 100.4 per cent year on year and 12 per cent sequentially to $255.8m. Net income was $15.3m, compared to a net loss of $90m in the year-ago quarter.

All three companies reported decent sequential increases in wafer shipments - 9.4 per cent for TSMC, 9.7 per cent for UMC and 4.8 per cent for Chartered - and rising average selling prices. They also benefited from a weaker US dollar exchange rate.

Chartered said its Q2 2004 utilisation level was 90 per cent, up from 55 per cent in Q2 2003 and 81 per cent in Q1 2004. It expects Q3 revenue to be much the same as Q2's, coming in between $252m and $258m, with net income between $4.5m and $14.5m.

"Since April until early June, based on our internal forecast, we were expecting a sequential growth rate of roughly seven per cent for Q3. However, since the second half of June, we saw weakness in Q3 forecasts from customers in the comms sector and to a lesser extent in the consumer sector," the company said. That will lead to changes in the company's product mix and "inventory build related to specific customers".

UMC expects wafer shipments to rise 19 per cent during Q3, ensuring "revenue and profit growth to continue into the third quarter". ®

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