TSMC, UMC post slight sales gains in Sept.

October 9, 2006 – Taiwan Semiconductor Manufacturing Corp. (TSMC) said September sales totaled US$811.5 million, down 0.5% from August but up 6.5% from a year ago. Preliminary 3Q06 revenues totaled $2.46 billion, a 2% increase from 2Q06, and a 17.6% increase from 3Q05. Revenues for the first nine months of 2006 totaled $7.25 billion, a 30.8% increase from the same period in 2005.

UMC, meanwhile, posted September revenues of $279.0 million, a 2% decline from August but an 8.6% increase from a year ago. UMC’s 3Q06 preliminary revenues were $841.6 million, about 8.2% higher than 2Q06 and 18.1% higher than 3Q05. Through September, UMC’s revenues totaled $2.36 billion, up 23.2% from Jan-Sept. 2005.

Analyst firm FBR Research thinks depreciation in the Taiwan dollar will undercut TSMC’s numbers to realize a 2% decline in revenues. In a research note, the firm stated that TSMC’s wafer shipments were flat to up 1% quarter-on-quarter in 3Q06, and that the company should expect a ~3% wafer shipment decline in 4Q, with weakness in the communications business (as customers including Qualcomm and Freescale work down inventories) partially offset by strength in the PC segment and related end-products (e.g. XBox 360-related orders).

FBR expects TSMC could increase capex guidance for FY07 by as much as 25% to support its 65nm capacity ramp and regain market share lost to rival UMC. Despite comments from TSMC execs about building inventories, FBR analysts expect through-wafer 1Q07 shipments “should turn out to be better than seasonal” at a 5% Q-Q decline.


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