Feeds

TSMC up, UMC down in Q2

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

  • alert
  • submit to reddit

The essential guide to IT transformation

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

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.