Taiwan Semiconductor Manufacturing Company (TSMC) has reported a 87.5% sequential drop in net income to NT$1.56 billion (US$47.11 million) for the first quarter, with revenues going down 38.8% on quarter to NT$39.5 billion.

TSMC's first-quarter net profit declined 94.5% from NT$28.14 billion a year ago. First-quarter net sales, which slid 54.8% on year, beat an earlier projection of NT$36-38 billion. Gross margin for the quarter was 18.9%, outperforming its estimate of 14-16%. Meanwhile, TSMC managed a positive operating margin in the first quarter, with 3.1%.

TSMC attributed its weak first quarter to customers' inventory adjustments amid the economic meltdown worldwide. The world's largest contract chipmaker said it saw a sharp decline in demand for semiconductors across all applications.

As for sales breakdown by technology, 0.13-micron and below process nodes accounted for 65% of TSMC's wafer revenues in the first quarter, followed by 90nm with 25%, 65nm with 23% and 45/40nm with 1%.

Looking into the second quarter, TSMC expects to see a significant increase in revenues, which are estimated to be between NT$71 billion and NT$74 billion. Gross margin for the quarter will rebound to 43.5-45.5 %, and the operating margin to 30.5-32.5 %.

TSMC said its capex budget for full-year 2009 is estimated to be around US$1.5 billion, a 20.6% cut from US$1.89 billion in 2008.

Rival United Microelectronics Corporation (UMC) yesterday announced its net loss for the first quarter of 2009 narrowed to NT$8.16 billion, compared to a net loss of NT$23.51 billion in the fourth quarter of 2008. The world's second-largest contract chipmaker said it expects to return to profitability in the second quarter, while seeing its utilization jump from 30% in the first quarter of 75%.

By: DocMemory
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