Chipmaker TSMC posts 24 percent rise in 2Q profit

Jul 18, 2013

(AP)—Taiwan Semiconductor Manufacturing Co., the world's largest contract chip manufacturer, reported a 24 percent jump in second quarter profit Thursday, driven by sales growth in smartphones and tablet computers that it warned is likely to fade in coming quarters.

The company said that April-June profit totaled NT$52 billion ($1.7 billion) on revenue of NT$156 billion.

But it acknowledged that rapid sales growth in high-end smartphones over the past two years was tapering off, affecting the company's revenue and profit margin.

The company said mid- and low-end handsets have experienced faster sales growth, but they do not contribute as much to profit because they use less sophisticated processors.

TSMC forecast modest growth in the third quarter, with revenue expected to reach NT$161-164 billion.

Revenue could drop as much as 7 percent in the fourth quarter compared with a year earlier, TSMC Chairman Morris Chang said.

Overall, the company said personal computers sales are expected to decline further in the second half, while smartphones and will suffer a modest decline.

Faced with intense competition, the company has moved into the cutting-edge 20 and 16 nanometer technologies, which allow for production of smaller chips that run faster at lower power.

TSMC is planning a record $10 billion of capital investment in 2013 to fend off competition, mainly from South Korea's Samsung Electronics Co. as well as Intel Corp., which has been speeding up its expansion into contract manufacturing following slow PC chip sales.

Chang said trial production using the advanced 20 nanometer technology began in the first quarter, with mass production beginning in 2014.

The company is building a new factory that uses the cutting-edge technologies, saying it is confident demand will remain strong despite competition.

"We do not build capacity until we're reasonably, highly confident of the demand" of customers, Chang said.

Explore further: Apple's fiscal 3Q earnings top analyst forecasts

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Chipmaker TSMC gets tablet, smartphone boost in 1Q

Apr 18, 2013

Taiwan Semiconductor Manufacturing Co., the world's largest contract chip manufacturer, reported an 18 percent jump in first quarter profit as increased global sales of smartphones and tablet computers boosted demand for ...

TSMC reports 32 percent profit jump in 4Q of 2012

Jan 17, 2013

Taiwan Semiconductor Manufacturing Co., the world's largest contract chip manufacturer, reported a 32 percent jump in profits in the final quarter last year, benefiting from increasing global sales of smartphones and tablet ...

TSMC reports 16 percent rise in 2Q profit

Jul 19, 2012

(AP) — Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, says its second quarter profit rose 16 percent year-on-year and predicted continuing strong growth in the third quarter.

TSMC reports shrinking profit, revenue in 3Q

Oct 27, 2011

(AP) -- Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, said Thursday its earnings dropped by more than a third in the latest quarter amid uncertainties about the global economy.

Taiwan's MediaTek profit up 51 percent in 1Q

May 06, 2013

MediaTek Inc., Asia's largest chipset designer, said Monday its first quarter profit grew 51 percent from a year earlier, boosted by China's flourishing smartphone market.

Intel cuts sales outlook as PC sales slump

Jul 17, 2013

(AP)—Intel Corp., the world's largest maker of chips for PCs, put a brave face on the decline of the global PC sales earlier this year, saying it expected its own sales to grow. Now, it's backtracking, saying sales will ...

Recommended for you

Apple's fiscal 3Q earnings top analyst forecasts

1 hour ago

Apple's growth prospects are looking brighter as anticipation builds for the upcoming release of the next iPhone, a model that is expected to cater to consumers yearning for a bigger screen.

Verizon 2Q profit rises 93 percent

8 hours ago

Verizon reported Tuesday that its second-quarter earnings nearly doubled after it secured full ownership of Verizon Wireless.

Ex-Qualcomm exec pleads guilty to insider trading

Jul 21, 2014

A former high-ranking executive of US computer chip giant Qualcomm pleaded guilty Monday to insider trading charges, including trades on a 2011 deal for Atheros Communications, officials said.

User comments : 0