TSMC’s revenue for this year may increase by up to 20%

According to Reuters, Taiwan Semiconductor Manufacturing Company (TSMC)’s fourth-quarter net profit was 41.6 billion New Taiwan dollars (US$1.43 billion), an increase of 32% year-on-year. As new devices from Apple, Samsung, and HTC boosted chip demand, TSMC's fourth-quarter revenue reached its guidance ceiling. TSMC said that due to seasonal reasons, revenue for the first quarter of 2013 is expected to be lowered from NT$131.3 billion in the fourth quarter of 2012 to NT$127 billion to NT$129 billion. However, TSMC will rebound strongly in April, and its total revenue growth in 2013 is expected to be 15 to 20 percentage points.

Beijing time on January 17 news, according to foreign media reports, TSMC today announced the fourth quarter of 2012 earnings report. The financial report shows that TSMC’s net profit for the fourth quarter was NT$41.6 billion (US$1.4 billion), an increase of 32% year-on-year.

TSMC said in its statement that its net profit in the fourth quarter was NT$41.6 billion, an increase of 32% compared with NT$31.6 billion in the same period of 2011. The average forecast of 22 analysts from Bloomberg for TSMC’s net profit for the quarter was NT$41.7 billion. TSMC’s combined revenue in the fourth quarter grew by 25% to NT$131 billion, which is in line with the average forecast of analysts. TSMC had previously forecast revenue for the fourth quarter at NT$129 billion to RMB131 billion.

As new devices from Apple, Samsung, and HTC boosted chip demand, TSMC's fourth-quarter revenue reached its guidance ceiling. Taiwan Semiconductor Manufacturing Co., chairman and CEO Zhang Zhongmou said last month that TSMC’s revenue this year may increase by up to 20%. Taking into account the long-term growth, TSMC's planned capital expenditures this year will reach a record $9 billion. TSMC’s total capital expenditure for 2012 was US$8.3 billion.

"Wall Street still underestimates TSMC's growth potential from 2013 to 2014," said Taiwan's KGI analyst Michael Liu in a January 10 report. He gave Taiwan Semiconductor Manufacturing Co. the "outperform" rating.

TSMC customers include Qualcomm, Broadcom and Infinity. The Taiwanese company said in October last year that its fourth-quarter revenue will decline month-on-month as customers handle inventory. TSMC today pointed out that this decline will continue this quarter.

Before the financial report was announced, the trading price of TSMC’s shares on the Taipei Exchange was NT$99.30. TSMC’s share price has increased by 31% in the past year.

Qualcomm CEO Paul Jacobs said last week that Qualcomm’s “bad communication” with TSMC has caused the chip shortage problem of the former to be solved. Both parties have taken new measures to ensure that the supply volume is in line with the order volume.

As new devices from Apple, Samsung, and HTC boosted chip demand, TSMC's fourth-quarter revenue reached its guidance ceiling. Taiwan Semiconductor Manufacturing Co., chairman and CEO Zhang Zhongmou said last month that TSMC’s revenue this year may increase by up to 20%. In order to continue to maintain its advantage in small chips, TSMC said last month that it plans to increase its annual capital expenditure from US$8.3 billion to US$9.0 billion. Competitors such as Global Foundries, Intel and United Microelectronics Corp have been waiting to narrow down their technology. With the gap in production capacity, this also puts TSMC inductance under heavy pressure.