TSMC's Q4 soars, but chip maker reduces spending
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Taiwan Semiconductor Manufacturing (TSMC) posted record sales and net profit in the fourth quarter as demand for chips in communications, computers, and consumer electronics products soared, the company said Thursday.The world&#39;s largest contract chip maker said sales grew more than 25 percent year-on-year to NT$93.9 billion (US$2.9 billion) in the three months ended Dec. 31. Net profit increased nearly 24 percent to NT$34.5 billion. TSMC&#39;s previous sales record was NT$88.96 billion in the third quarter of 2007, while its prior record net profit came in the second quarter of 2006, NT$34.0 billion.TSMC&#39;s fourth quarter sales beat its own guidance in part due to increased demand for more advanced chips made using 90-nanometer, 65-nanometer and even finer manufacturing technologies. A total of 10 percent of TSMC&#39;s sales were for 65-nanometer and below technologies in the fourth quarter, up from 7 percent in the third quarter. The nanometer term describes the size of the smallest feature manufactured on a single chip. There are about three to six atoms in a nanometer, and a billion nanometers in a meter. Reducing the size of the features on a chip enables companies to create smaller, more energy efficient, and more powerful chips.&quot;Demand for advanced technology capacity remained very strong throughout the year,&quot; said Rick Tsai, president and CEO of TSMC, during the company&#39;s investors&#39; conference. &quot;This will continue to grow,&quot; he said.The company forecast strong guidance for the first quarter of this year, saying mobile phone and PC shipment growth should help bolster the chip industry. TSMC is a bellwether for the global IT industry due to the number and variety of chips it produces for a range of electronic gadgets.TSMC predicts its revenue will drop to between NT$87 billion and NT$89 billion in the first quarter, a slimmer decline than analysts had expected.TSMC&#39;s biggest rival, Taiwan&#39;s United Microelectronics predicted a far worse first quarter, with revenue forecast to decline by as much as 15 percent and it may post a loss for the quarter. UMC posted sales of NT$27.6 billion in the fourth quarter, up nearly 6 percent year-over-year, but its net profit fell 76.1 percent to NT$1.36 billion.TSMC joined a number of other chip makers in slashing its capital spending&#160;for this year. The company predicted its 2008 spending on new factories and production line equipment will reach only US$1.8 billion, down from US$2.6 billion last year. UMC forecast its 2008 capital spending at US$500 million to US$700 million, down from US$900 million last year.&quot;In the coming five years, we believe the capital intensity will be lower than the last five years.,&quot; said Lora Ho, TSMC&#39;s chief financial officer, indicating the company expects to spend less in coming years than it has in the past few years.Several&#160;Taiwanese chip makers have already announced significantly lower capital spending&#160;forecasts for this year, due in part to concerns about global economic growth and partly to a glut of DRAM (dynamic RAM) memory chips.&#160;
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Newest P4 chips, the 500 series, drop in price by 18 percent to 35 percent; a host of other chips are cheaper now as well.
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Intel's financial results for the fourth quarter fell short of analysts' estimates in part because of weak prices for memory chips.
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Advanced Micro Devices' move to cut overhead costs by outsourcing its chip manufacturing business may backfire in the long run, according to several analysts who have downgraded the company's stock.
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Intel&#39;s revenue increase for the fourth quarter fell short of analysts&#39; estimates in part because of weak prices for memory chips.
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In a rough year for semi stocks, Advanced Micro Devices has thrived. Is there more room to run? NEW YORK (CNN/Money) - Tech stocks have had a nice year-end rally but that hasn&#39;t been enough to pull the chip sector out of the red.
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Taiwan Semiconductor Manufacturing Company (TSMC) and Freescale Semiconductor expect to begin initial production of a high-speed 65nm silicon-on-insulator (SOI) process in the fourth quarter of 2005, with volume production pending on market demand
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Texas Instruments Inc. (TXN.N: Quote, Profile, Research) , the largest maker of chips for cell phones, trimmed its third-quarter revenue outlook on Wednesday as customers
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DALLAS -- Texas Instruments Inc., the leading maker of chips for cell phones, cut its profit and revenue forecast for the fourth quarter on Monday due to slower sales of semiconductors, and it warned that sales could weaken further early next year.
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(InfoWorld) - News coming out the chip sector has been great so far this week, but analysts warn that economic woes such as the housing mess might still spoil the party. The consensus among analysts appears to be that corporate and personal spending on technology products will be hurt by the housing issues in the U.S., but nobody knows how bad the impact will be, according to Peter Sutton, head of research at CLSA Asia-Pacific Markets in Taipei. Demand for technology products, especially computers and mobile phones, in the rest of the world is going strong, he said, but even that demand could pull back in the event of a U.S. slowdown because many developing countries depend on exports to the U.S. for income. By the end of this year, people should know how bad the loan and home foreclosure situation will be, according to Sutton. The housing market in the U.S., he said, is expected to bottom in the first quarter of next year. The fear is that the housing issues could hurt consumer spending at some point later this year, but so far the technology industry isn't showing any signs of trouble. The flow of good news started in Asia on Monday with the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co. (TSMC), reporting record high sales in August and revising up its third quarter financial guidance. The company, considered a bellwether for the overall tech industry because of the variety of gadgets it makes chips for, said consolidated sales in August rose 10 percent year-over-year to NT$30.02 billion (US$907.0 million), beating its previous record of NT$27.96 billion from July of last year. TSMC also predicted its third quarter revenue will likely hit between NT$87 billion to NT$89 billion, higher than a previous forecast of NT$85 billion to NT$87 billion, and said its gross margin would come out at the top end of expectations. Some customers asked TSMC to ship some chips earlier than expected, a spokesman for the company said, but the company won't comment on how that might impact the fourth quarter. Taiwanese chip designer MediaTek followed up TSMC's news, announcing an agreement to buy certain telecommunications chips products from Analog Devices Inc., of Norwood, Massachusetts, for US$350 million in cash. The deal itself isn't huge, but merger and acquisition activity normally takes place when companies see bright prospects for the future, and MediaTek is looking to use the acquisition as part of its mobile phone chip strategy. Among the products the company acquired is a chipset used in TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) basebands and radio receiver products, which will help it increase its presence in its main market, China. TD-SCDMA is the 3G (third-generation) telecommunications standard being pursued in China. Positive corporate news for chip makers didn't stop in Asia. As the work day opened in the U.S., technology industry watchers were treated to theÂ long-awaited launch of Barcelona, the new quad-core processors from Advanced Micro Devices. The Sunnyvale, California company announced a number of companies are already using the chips, including IBM, Sun Microsystems, Dell, and Gateway. The world's largest chip maker capped Monday with the biggest news of the day.Â Intel raised its third quarter revenue forecastÂ to between US$9.4 billion and US$9.8 billion from a previous range of US$9.0 billion and US$9.6 billion, and said its gross margin would be at the upper end of guidance due to stronger than expected global demand for computing products. Despite the strong chip news and outlook for the current quarter, which ends Sept. 30, the future remains uncertain. "Near term data shows little evidence of order cutbacks in the tech supply chain," said Warren Lau, chip analyst at Macquarie Research Equities. "But having said that, the question remains: will the sky come crashing down because of the meltdown in the U.S. subprime markets?"
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GIANT SEMI foundry Taiwan Semiconductor Manufacturing Co (TSMC) warned that while business is steady, its customers are dealing with rising levels of stock.
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Texas Instruments Inc., the leading maker of chips for cell phones, cut its profit and revenue forecast for the fourth quarter on Monday due to slower sales of semiconductors, and it warned that sales could weaken further early next year.
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Montalvo Systems has a multiple-core chip, but not all of the cores are the same. That in part explains why investors have put money into it.
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Advanced Micro Devices Inc. posted a fourth-quarter loss Tuesday as the chip maker converted and retired debt, and faced stiff competition and low prices in its business that supplies flash memory chips for cellular phones.
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A strong demand for its computer chips brightens otherwise dismal year for the maker of semiconductors. By Laurie J. Flynn. SAN FRANCISCO -- Eking out a strong finish to end a disappointing year, Intel Corp
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Faced with mountains of inventory, quick thinking by some semiconductor manufacturers helped the market avoid its first decrease in chip sales since the war in Iraq began.
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(InfoWorld) - The global chip market is suffering from falling prices in microprocessors and memory chips, bad news for companies but great for users. Steep declines in DRAM (dynamic RAM) for PCs and NAND flash memory, used in a variety of gadgets including digital cameras and iPods, as well as microprocessors prompted the Semiconductor Industry Association (SIA) to slash its global sales forecast for this year to US$252 billion, just 1.8 percent growth compared to last year. The previous estimate called for sales growth of 10 percent this year. Sales of gadgets themselves are on track to meet forecasts, however, SIA said. Chip shipments overall remain healthy, as does end-user demand. But prices continue to fall for a variety of reasons, including a glut in the memory market and a price war between Intel Corp. and Advanced Micro Devices Inc. in microprocessors. "End markets continue to be strong, with consumers realizing major benefits from lower chip prices coupled with ever-increasing performance and functionality from advances in chip technology. Despite a forecast of slower growth, we expect that global sales of microchips will surpass last yearâs record level," the SIA said in a statement on Wednesday. Intel and AMD have been battling each other through price reductions for over a year now, and reports indicate that Intel will cut prices on some microprocessors again in late July. The price war has been good to consumers, delivering more technically advanced microprocessors at a lower cost. Microprocessors are generally the most expensive chip inside a PC. The DRAM market has been hit the worst. The price of mainstream 512M-bit second-generation double data rate (DDR2) DRAM that runs at 667MHz has plunged 72 percent so far this year to US$1.79 per chip, according to DRAMeXchange Technology Inc., a Taiwanese clearinghouse for the chips. The market research division of the company has noted that the chips appear to be bottoming out, and that prices could tick up a bit later this month. DRAM price reductions for users normally come a few weeks or a month after the spot DRAM market falls. NAND Flash memory has suffered a similar fate as DRAM, but not quite as steep a decline. A glut of the chips early in the year has been wiped out by memory makers, which tweaked production lines to make more DRAM instead of NAND flash. Prices of 8G byte NAND has fallen 18 percent his year to US$9.26, according to DRAMeXchange, while the 4G byte capacity has dropped nearly 15 percent to US$5.69. The SIA expects PC and mobile phone sales to rise 10 percent each this year. Mobile phone sales may give chips a bigger boost, however, because users are buying more 3G (third generation communications) handsets, which contain more chips than older phones. Sales of personal media players and digital music players are expected to grow by more than 20 percent this year, SIA said, but noted that price competition in the market will likely keep NAND flash chip prices tame. The SIA report followsÂ a similar estimation of the global chip industry by Gartner. A few weeks ago, the market researcher lowered its forecast to just 2.5 percent growth to US$269.2 billion this year, down from an earlier estimate of 6.4 percent. Â ADVERTISEMENTIBM Information On Demand 2006Industrial Industry Leaders, please join us at IBM's premier information management global event, IBM Information On Demand 2006, October 15-20, Anaheim, CA. More IBM business and technical solutions content in one place than ever before! Select from  over 800 sessions. Register today!