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TSMC, UMC Q1 sales slide

March revenues a sign for optimism?

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TSMC, the world's biggest chip foundry, and arch-rival, UMC, yesterday both reported big drops in output and sales for the first three months of the new year.

TSMC saw revenues fall 3.2 per cent to TWD55.65bn ($1.77bn) from the year ago quarter's TWD57.51bn ($1.82bn) and 12.9 per cent down on the previous quarter's TWD63.88bn ($2.03).

The foundry's fabs ran at 78 per cent capacity during Q1 FY2005, down from 88 per cent in Q4 FY2004 and 103 per cent in Q3 FY2004.

However, sales appear to be picking up. "Due to higher wafer shipments, net sales for March 2005 increased by 2.4 per cent compared to February 2005. On a year-over-year basis, net sales for March 2005 decreased 11.8 per cent," said Lora Ho, TSMC VP and CFO.

UMC's Q1 FY2005 sales totalled TWD20.29bn ($643.56m), down 19.9 per cent on the year-ago quarter's TWD25.33bn ($803.41m) and 28.1 per cent on Q4 FY2004's TWD28.23bn ($895.40m).

It said it expects Q1's capex to come to 60 per cent, when audited, down from 72 per cent in Q4.

Like TSMC, UMC saw sales rise during the tail end of the quarter, with revenue increasing 14 per cent between March and February.

Last month, market watcher iSuppli revealed its calculations to show that the worldwide chip inventory glut is now almost depleted. It's this heap of unsold chips that has hit demand for new wafers so hard, pushing back the foundries' capacity utilisation rates in Q4 2004 and again in Q1 2005. With both firms reporting growing sales in March, the outlook for Q2 has to be more positive. However, neither TSMC nor UMC offered any guidance for their performance in the current quarter. ®

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