TSMC is expecting sales to improve in the June quarter as demand picks up and customers build up inventories in the wake of SARS, according to company chairman Morris Chang.

TSMC, the world's No.1 pure-play foundry service provider, reported sales fell 4% from the December quarter, to $1.12 billion but net profits soared 70% to $124.6 million during the same period.

Chang said that he sees second quarter wafer shipments rising more than 20% from the prior quarter while average selling prices (ASPs) will climb 4%.

"The second quarter looks pretty strong," Chang told analysts in a meeting in Taipei Tuesday. "Demand will increase across applications: PCs, consumers and communications."

TSMC's major customers include Altera, ATI Technologies, Motorola, Nvidia, Texas Instruments and Via Technologies, according to analysts.

Chang's comments suggested that demand is improving from integrated device manufacturers and fabless design houses.

He also pointed out that the current outbreak in Asia of the mysterious flu virus, SARS, hasn't had any impact on TSMC's operations or orders.

"Our customers are loading inventories. Short-term indicators from them are pointing to very encouraging directions," the TSMC chairman said.

TSMC's capital spending budget for 2003 will remain at $1 billion to $1.5 billion as forecast earlier this year, Chang said.

In the March quarter, 0.13-micron process accounted for 11% of TSMC's total sales, jumping 8% sequentially, said Harvey Chang, the company's chief financial officer. The foundry is intensifying its efforts on 0.13 micron and 0.09 micron technologies, in part because IBM Corp. has entered the race and won Nvidia as a customer, some analysts said.

By: DocMemory
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