Feeds

TSMC up, UMC down in Q2

But both foundries a long way from last year's highs

  • alert
  • submit to reddit

The Power of One Infographic

TSMC, the world's biggest chip foundry, strengthened its financial position during its second quarter over the previous three-month period, though it still has some way to go to achieve the highs of Q2 FY2004.

Its arch-rival, UMC, the world's second biggest foundry, proved less successful, with sales and profits down sequentially and year on year.

Both firms' sliding revenues were anticipated earlier this month after they published their June sales tallies.

TSMC reported revenues of TWD58.52bn ($1.83bn), up 5.1 per cent on the previous quarter but down 9.8 per cent on the year-ago period. Net income came to TWD18.37bn ($575m), up 9.2 per cent sequentially but down 21.5 per cent year on year. The company reported earnings of TWD0.74 per share.

Wafer shipments rose 14.5 per cent sequentially during the quarter, hindered by a 4.5 per cent fall in average selling prices, TSMC said. Revenue from 90-130nm process lines fell from 45 per cent of the total in Q1 to 43 per cent in Q2. Gross margins rose by less than a percentage point to 39.7 per cent as more capacity was given over to production.

TSMC attributed the sequential gains to "demand recovery from our customers" and noted that it expects this trend to continue through Q3. It said it expects wafer shipments to rise approximately 15 per cent during the current quarter as capacity utilisation rises to beyond 90 per cent. That will push gross margins up 1.3-3.3 percentage points to 41-43 per cent, it forecast. ASP will fall again, "by a low to mid single digit percentage point".

UMC's Q2 FY2005 sales totalled TWD19.44bn ($609m), down 4.2 per cent sequentially and 33.4 per cent year on year. Net income plunged 93.1 per cent sequentially and 97.9 per cent year on year to TWD212m ($6.7m) as the company slipped into red operationally. Earnings fell to a mere TWD0.02 per share.

Still, UMC reckons the worst is over: "We are quite confident we have exited the trough of the downturn," said company CEO Jackson Hu.

Wafer shipments were up 11.7 per cent sequentially, UMC said. Capacity utilisation topped 65 per cent, higher than the 60 per cent utilisation rate UMC had previously predicted. The share of revenues arising from its 90nm process rose from seven to nine per cent. However, ASP fell nine per cent over Q1 FY2005 as demand shifted toward older, larger processes, as it did at TSMC.

Like TSMC, UMC expects wafer shipments to rise by around 15 per cent during Q3, though it also expects ASP to rise slightly. At an operational level, it expects to break even or report a slight loss. ®

Related stories

TI reaps wireless boom
Elpida falls into red on weak DRAM prices
Freescale grows Q2 earnings on flat sales
Intel overcomes 'weak' line-up during Q2
Rambus reports record revenue
AMD shrugs off Intel shackles for ace Q2
Chip kit market shrinks
TSMC, UMC Q2 sales slide
UMC chairman to quit over China investment case

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.