The world's largest supplier of made-to-order chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), yesterday said sales rose 14.2 percent to a record of NT$26.2 billion (US$778 million) last month, according to a company statement.
The figure marked a 4 percent rise from NT$25.23 billion two months ago.
"Due to continued demand recovery from our customers, wafer shipments for October 2005 increased over September 2005," company vice president and chief financial officer Lora Ho (
Sales in the 10 months to last month fell to NT$209.65 billion from NT$215.09 billion in the same period last year, the statement read.
Shares of TSMC rose by 1.47 percent to close at NT$55.30 on the Taiwan Stock Exchange yesterday. The company released its sales report after the stock market closed. Rival United Microelectronics Corp (
Taiwan Ratings Corp (
"The ratings reflect TSMC's dominant market position in the global semiconductor foundry sector, advanced technology capability, high manufacturing efficiency, and solid customer base," Taiwan Ratings said in a statement.
TSMC's strong business position is underpinned by a market share of around 50 percent of the global semiconductor foundry sector, which is significantly larger than that of its rivals.
"The ratings also reflect TSMC's very strong profitability and cash flow, abundant liquidity, and very low leverage," the statement added.
The Semiconductor Industry Association, a San Jose, California-based trade group, predicts worldwide chip sales will gain 8.8 percent next year, from a 6 percent pace projected for this year. Last year, global chip sales rose 28 percent to US$213 billion.
Although the semiconductor foundry sector is highly cyclical and intensely competitive, Taiwan Ratings said TSMC has been able to widen the distance between itself and its competitors.
This is reflected in TSMC's very high gross margin, which averaged 41 percent in the first three quarters of this year and is expected to reach 47-49 percent in the fourth quarter. This is significantly higher than its competitors' average gross margin of less than 20 percent. Major factors contributing toward TSMC's high margin are its low manufacturing costs, which result in a lower breakeven level, and better product mix with more products using advanced technologies (0.13-micron and below), which garner higher selling prices.
On Tuesday, for instance, TSMC's board approved capital spending of US$706.5 million for expansion as the company will use the money to increase capacity of the company's 12-inch plants' 65 nanometer process, and its 8-inch plants' 0.18-micron and 0.15-micron processes.
Moreover, TSMC has very strong profitability, according to Taiwan Ratings.
The chipmaker reported record-high revenues of NT$256 billion last year, while net income reached NT$92.3 billion. Revenues are expected to reach new record highs of more than NT$260 billion this year, while net income is projected at around NT$92 billion.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS