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Brisk sales send TSMC's Q4 revenue to new high

Brisk sales send TSMC's Q4 revenue to new high

Taiwan Semiconductor Manufacturing, the world's largest contract chipmaker, said its revenue soared during the fourth quarter as chip sales rose among all major segments - computers, communications and consumer electronics.

The company said its fourth quarter revenue increased 27 per cent compared to the same time a year earlier to a new all time high NT$81.2 billion ($US2.54 billion as of December 31, the end of the three-month period being reported.) The previous record was NT$69.7 billion, set in the third quarter of 2004. Net profit leaped 53 per cent to NT$33.9 billion, from NT$22.2 billion.

The results beat the NT$32.8 billion net profit analysts expected the company to report, according to a poll by Thomson Financial.

"As a result of stronger than expected demand across all major product segments, fourth quarter revenue surpassed guidance," TSMC said. The chipmaker's gross margin climbed five points to 49.1 per cent as it filled its production lines to capacity and then squeezed out more work from them, reporting a utilisation rate of 104 per cent for the quarter.

In the first quarter, TSMC expects its revenue to decline by between 6 per cent and 10 per cent compared with the previous three months to $NT73 billion-$NT76 billion, as consumers slow their purchases of technology items after the busy holiday season.

The size of the of the decline dismayed some analysts, who had been expecting a brighter forecast.

TSMC executives blamed the expected drop-off on currency fluctuations and the normal seasonal slow down in demand during the first quarter.

The Taiwan dollar has strengthened by more than 4 per cent compared with the US dollar since the beginning of the year, yet average selling prices are not keeping pace with the decline of the US currency. Over three-quarters of TSMC's customers are North American companies, such as Texas Instruments and graphics chip designer, Nvidia.

Demand for chips used in personal computers remains brisk, however. TSMC expected the demand to remain at about the same level as the fourth quarter due to new graphics chip products and continued strong demand for chipsets from Taiwanese makers, the company's chief executive officer, Rick Tsai, said.

TSMC plans to spend between $US2.66 billion and $US2.8 billion on new production lines and factories this year, up slightly from $US2.49 billion last year.

The company plans to hire about 3500 people this year, up by 400 on than the 3100 people it hired last year.


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