September 10, 2007 – TSMC posted slightly better sales in August than the previous month, but said that full 3Q07 sales and margins would be better than expected, fulfilling at least one analyst’s predictions.

Unconsolidated revenues in August were roughly US $883.7 million, up 1.5% from July and 8.1% from August 2006. Consolidate sales showed a 1.8% increase month-on-month to $908.6 million, up 10% from a year ago.

So far in 2007 through eight months, TSMC’s sales are running a bit behind the same period in Jan-Aug. 2006: -8.1% to $5.88 billion (unconsolidated) and -7.4% to $6.03 billion (consolidated).

However, the Taiwan foundry says business is picking up, with some customers requesting pull-ins. Revenue is now expected to be between $2.63-$2.69 billion, up 15%-18% from 2Q, with both gross and operating margins squeaking past the high end of previous guidance to 43%-45% and 33%-35%, respectively (the low end of those ranges would be flat with 2Q). That implies gross profits of about $1.21B (vs. $778M in 2Q), and an operating profit of $942M (vs. $754M in 2Q).

Last week, FBR Research senior VP Mehdi Hosseini wrote in a research note that TSMC’s initial 3Q07 predictions were “conservative” and that customers had started to pull in orders, leading to a rosier forecast for both 3Q and 4Q as well.