TSMC sees December sales slip, but investors bullish

January 11, 2007 – Like rival foundry UMC, Taiwanese top foundry TSMC posted a ~4% decline in sales in December, but year-on-year growth was in the teens, and investors see future growth from expansion into China.

TSMC posted December sales of about $675 million, down about 3.7% from November and 18% below December 2005. Fourth-quarter sales totaled about $2.2 billion, down 9% from 3Q06 and about 8% from 4Q05. For the year, though, TSMC sales grew about 19% to a record $9.5 billion.

Earlier this week UMC posted December sales of $256.3 million, a 3.7% sequential decrease and 7.7% lower than December 2005, following similar M-M and Y-Y declines in November. Fourth-quarter sales were down about 6.25% sequentially to $790 million. For the full year, UMC’s sales were up about 14.7% to $3.19 billion.

The Taiwan Economic News noted that UMC’s 6.25% decline in 4Q sales was actually a bit better than the 7%-9% drop that analysts had expected. Also, institutional investors are raising their estimates for TSMC’s stock prices in anticipation from new business in China, following the Taiwan government’s policy of allowing transfer of 0.18-micron processes to the mainland, where TSMC already is the sole Taiwan chipmaker, operating 0.25-micron lines.


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