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1999 First Quarter Financial
Reports |
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Taiwan Semiconductor Manufacturing Company
Ltd. Announces
First Quarter Results
for the Period Ended
March 31, 1999 |
| Hsin-Chu, Taiwan, R. O. C., April 20th, 1999
!X Taiwan Semiconductor Manufacturing Company Ltd. (TAIEX: 2330,
NYSE: TSM), ("TSMC" or "the Company") the
world!|s largest dedicated semiconductor foundry company, announced
today the results of its operations for the first quarter ended
March 31, 1999. All figures were prepared in accordance with
generally accepted accounting principles in Taiwan. |
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| 1Q99 Results: Year-over-Year
Comparison |
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Highlights |
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Net sales declined
20.6% to NT$12,501 million. |
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Operating income declined 27.4%%
to NT$4,873 million. |
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Net income declined 41.1% to
NT$4,090 million. |
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Diluted earnings per share (EPS)
declined 41.1% to NT$0.68 from NT$1.15. |
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Net Sales: |
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Net sales in 1Q99 totaled NT$12,501
million, down 20.6% compared with NT$15,736 for the same
period of 1998, as a combined result of lower unit sales
of 8-inch equivalent wafers and a lower average selling
price (ASP). The unit sales of 8-inch equivalent wafers
fell 8.8% to 319.6K units in 1Q99 from 350.5K in the same
period of 1998. Pure price erosion was 18.2%, which was
partially offset by favorable product mix and favorable
foreign exchange rate. In US dollar terms, quarterly ASP
declined 12.6% to US$1,101 per 8" equivalent wafer.
The ASP in the New Taiwan dollar declined by 13.6% YoY
to NT$35.9K in 1Q99. New Taiwan dollar appreciated from
the weighted average rate of NT$33.00 to NT$32.58 per
US dollar during this period. |
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Gross Margins: |
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The gross margin declined to 49.6%
in 1Q99 compared with 52.3% in 1Q98 due to a net impact
of price erosion and lower capacity utilization. Capacity
utilization decreased to 88% in 1Q99 from 102% in 1Q98. |
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Operating Expenses: |
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Operating expenses in the 1Q99 declined
12.9% from the same period a year ago to NT$1,326 million
due to cost control efforts. Operating expenses as percent
of net sales slightly increased to 10.6% in 1Q99 from
9.7% in the same period of 1998. |
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Non-Operating Income/Expenses: |
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Net non-operating expense increased
to NT$536 million in 1Q99 from NT$196 million in 1Q98.
Non-operating income increased to NT$221 million in 1Q99
from NT$143 million in 1Q98 mailing due to NT$70 million
increase in interest income. Non-operating expenses increased
to NT$757 million in 1Q99 from NT$340 million in 1Q98
due mainly to NT$388 millioncharge for WafterTech!|s 85%
capacity obligation. Investment loss increased to NT$226
million in 1Q99 compared to investment gain of NT$20 million
in 1Q98. Loss came from WaferTech (NT$174 million), Vanguard
International Semiconductor Company (NT$34 million). Consequently,
the profit margin before tax declined to 32.9% in 1Q99
from 41.5% a year ago. |
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Net Income: |
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Net income tax expenses for 1Q99 was
NT$22 million, down from NT$414 million of tax credit
in 1Q98. Net income declined 41.1% to NT$4,090 million
in 1Q99. Diluted earnings per share were NT$0.68 for 1Q99,
down from NT$1.15 in the same period of 1998. |
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Operations Highlights |
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Sales to the fabless segment as percent
of total sales reached 73% in 1Q99 versus 71% in 1Q98.
Sales to North America regions as percent of total sales
dropped to 48% versus 52% in 1Q98. Product mix in logic
represented 90% vs 74% in 1Q98 of TSMC revenue, while
memory represented 10% vs 26% in 1Q98. Under the new classification,
revenue breakdown by end market for 1Q99 was computer
40%, communication 26%, consumer 18%, memory 12%, and
industrial/others 4%. Historical annual breakdown under
the new classification for 1998 was computer 38%, communication
25%, consumer 15%, memory 18%, and industrial/other 4%.
Breakdown for 1997 was computer 38%, communication 21%,
consumer 15%, memory 23%, and industrial/others 3%. |
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| 1Q99 Results: Sequential |
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Highlights |
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Sequential recovery
in order volume continued. |
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Net sales increased 7.5% to NT$12,501
million. |
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Operating income increased 68.5%
to NT$4,873 million. |
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Net income increased 62.0% to
NT$4,090 million. |
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Diluted earnings per share were
NT$0.68, an increase of 62.0% from NT$0.42 in 4Q98. |
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Net Sales: |
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Net sales in 1Q99 totaled NT$12,501
million, up 7.5 % compared with 4Q98, as a result of higher
unit sales of 8-inch equivalent wafers, offsetting an
impact of lower ASP. Unit sales of 8-inch equivalent wafers
grew 11.7% to 319.6K units in 1Q99 from 286.2K in 4Q98.
In US dollar terms, the quarterly ASP decreased 5.4% to
US$1,101 per 8" equivalent wafer from US$1,164 in
4Q98, mainly due to pure price erosion of 4.9%. Unfavorable
foreign exchange rate resulted in 7.3% decline in ASP
in the New Taiwan dollar to NT$35.9K. The New Taiwan dollar
appreciated from the weighted average rate of NT$33.33
to NT$32.58 per US dollar during the period. |
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Gross Margins: |
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The gross margin recovered to 49.6%
in the 1Q99 compared with 33.8% in 4Q98 mainly due to
capacity utilization improvement from 67% in 4Q98 to
88% in 1Q99. |
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Operating Expenses: |
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Operating expenses in 1Q99 increased
by 27.5% to NT$1,326 million from NT$1,040 million in
4Q98. Operating expenses as percent of net sales increased
to 10.6% in 1Q99 from 8.9% in 4Q98. |
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Non-Operating Income / Expenses: |
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Net non-operating expense was NT$536
million in 1Q99 compared to non-operating income of NT$115
million in 4Q98. Non-Operating income decreased in 1Q99
to NT$221 million from NT$487 million in 4Q98 mainly due
to lower foreign exchange gain. Non-operating expenses
were NT$757 million in 1Q99, up from NT$371 million in
4Q98 primarily due to NT$388 million charge for WaferTech
85% capacity obligation. Investment loss decreased to
NT$226 million in 1Q99 compared to investment loss of
NT$483 million in 4Q98. Reduced investment loss was result
of better conditions in VISC and WaferTech. |
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Net Income: |
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Net income tax expenses for 1Q99 was
NT$22 million compared to NT$1 million net tax expense
for 4Q98. Net income increased 62.0% to NT$4,090 million
in 1Q99 from NT$2,524 million in 4Q98 and diluted earnings
per share (EPS) grew to NT$0.68 from NT$0.42 in 4Q98. |
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Operations Highlights |
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During the 1Q99, TSMC experienced a
continuous sequential recovery in order volume. Average
capacity utilization rate rose to 88% compare with 67%
in the 4Q98. Installed capacity was down 13% to 373K in
1Q99 compared to 431K in 4Q98 in terms of 8-inch equivalent
wafers due to periodic maintenance, upgrades, and fewer
working days. In order to accommodate increasing demand,
the Company announced an upward revision in its capital
expenditure for 1999. The current capital expenditure
plan stands at minimum US$780 million excluding WaferTech.
This plan represent an increase of 50% compares to the
previous plan of US$519 million that was announced earlier
during the 4Q98 conference call. Capital expenditure plan
for WaferTech in 1999 is currently planned at US$106 million.
As a result, total wafer capacity for 1999 is now scheduled
to increase by 11% YoY to approximately 1.8 million 8"
equivalent wafers compared to the previous plan of 7%.
Sales to the fabless segment as percent of total sales
lowered to 73% in 1Q99 versus 76% in 4Q98. Sales to
integrated device manufactures (IDM) rose to 25% versus
22% in 4Q98; while sales to system OEM remained the
same at 2%. Sales to North America regions as percent
of total sales dropped to 48% versus 64% in 4Q98. Product
mix between logic and memory was almost unchanged. Logic
represented 90% (versus 91% in 4Q98), while memory represented
10% (versus 9% in 4Q98). |
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Company Description: |
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Founded in 1987, TSMC is the first
and largest semiconductor foundry company in the world.
The company is based in Taiwan's "Silicon Valley",
the Hsin-Chu Science-Based Industrial Park, and is dedicated
to providing manufacturing services for advanced integrated
circuits to fabless design houses and integrated device
manufacturers (IDM). The company operates two 6-inch wafer
fabs and three 8-inch wafer fabs offering a comprehensive
set of IC fabrication processes, including processes to
manufacture CMOS logic, mixed mode, volatile and non-volatile
memory and BiCMOS chips. In mid-1996, TSMC began construction
on the first-ever, pure-play foundry in the US, WaferTech,
in Camas, Washington, - a $1.2 billion joint venture.
Fab 6 and 7 will be located in the new Tainan Science-Based
Industrial Park in Taiwan. |
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Corporate Headquarters: |
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Taiwan Semiconductor Manufacturing
Company Ltd.
No. 121, Park Avenue III, Hsin-Chu Science-Based Industrial
Park
Hsin-Chu, Taiwan, R. O. C.
Tel: 886/3/578-0221 www.tsmc.com
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