TAIPEI: Top contract chipmaker TSMC wrapped up 2010 with record sales, boding well for this year as the company is set to boost TECHNOLOGY [] spending to churn out more advanced chips for new hi-tech gadgets, according to a Reuters report on Monday, Jan 10.
TSMC has been taking a front seat in the chip foundry market in driving technology to smaller circuitry that allows the design of more powerful chips for more complex devices including cellphones, PCs and flat-screen TVs.
Greater economies of scale and a wider customer base also allow TSMC to enjoy fatter margins than smaller competitors such as United Microelectronics Corp (UMC) and Semiconductor Manufacturing International Corp.
Before the sales figures, TSMC's Taipei-listed shares rose to their highest close in a decade, reflecting investors' confidence in the firm's solid fundamentals.
"The tech sector is on a upward trend so foundries should also benefit from the trend," said Michael On, managing director at Beyond Asset Management.
"But we are cautious on the second half this year. If everyone is too optimistic about demand, inventories might grow and that's not good news," said On, who owns TSMC shares in his portfolios.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), which supplies to major clients including Texas Instruments, Qualcomm and Nvidia, reported unconsolidated sales of T$33.75 billion ($1.2 billion) for last month.
That was up 10.8 percent from a year earlier but down 5.5 percent from November, it said, without giving other details.
For all of 2010 on a consolidated basis, TSMC's sales amounted to T$419.54 billion, up 41.9 percent from 2009.
October-December consolidated sales were T$110.14 billion, beating TSMC's own forecast of between T$107-109 billion and higher than market expectations of T$106.39 billion, according to Thomson Reuters I/B/E/S.
No.2 chip foundry UMC posted its third month-on-month fall in sales last Friday.
TSMC released the results as the Taipei stock market closed on Monday. TSMC shares rose 2.34 percent and UMC shares jumped 1.9 percent, outpacing the main TAIEX's 0.4 percent gain.
Citi said it expects chips made by advanced 40 nanometre technology to contribute more than a quarter of TSMC's total revenue in 2011. The 40-nanometre chips made up 17 percent of TSMC's revenue in the third quarter of 2010.
The squeezing of more circuits onto a single chip increases chip yield per wafer, boosting efficiency.
Citi has raised its target share price on TSMC by 7.7 percent to T$84, implying upside of 13 percent from Monday's close.
TSMC is set to report fourth-quarter earnings and give guidance for the first quarter of 2011 in late January. - Reuters
TSMC has been taking a front seat in the chip foundry market in driving technology to smaller circuitry that allows the design of more powerful chips for more complex devices including cellphones, PCs and flat-screen TVs.
Greater economies of scale and a wider customer base also allow TSMC to enjoy fatter margins than smaller competitors such as United Microelectronics Corp (UMC) and Semiconductor Manufacturing International Corp.
Before the sales figures, TSMC's Taipei-listed shares rose to their highest close in a decade, reflecting investors' confidence in the firm's solid fundamentals.
"The tech sector is on a upward trend so foundries should also benefit from the trend," said Michael On, managing director at Beyond Asset Management.
"But we are cautious on the second half this year. If everyone is too optimistic about demand, inventories might grow and that's not good news," said On, who owns TSMC shares in his portfolios.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), which supplies to major clients including Texas Instruments, Qualcomm and Nvidia, reported unconsolidated sales of T$33.75 billion ($1.2 billion) for last month.
That was up 10.8 percent from a year earlier but down 5.5 percent from November, it said, without giving other details.
For all of 2010 on a consolidated basis, TSMC's sales amounted to T$419.54 billion, up 41.9 percent from 2009.
October-December consolidated sales were T$110.14 billion, beating TSMC's own forecast of between T$107-109 billion and higher than market expectations of T$106.39 billion, according to Thomson Reuters I/B/E/S.
No.2 chip foundry UMC posted its third month-on-month fall in sales last Friday.
TSMC released the results as the Taipei stock market closed on Monday. TSMC shares rose 2.34 percent and UMC shares jumped 1.9 percent, outpacing the main TAIEX's 0.4 percent gain.
Citi said it expects chips made by advanced 40 nanometre technology to contribute more than a quarter of TSMC's total revenue in 2011. The 40-nanometre chips made up 17 percent of TSMC's revenue in the third quarter of 2010.
The squeezing of more circuits onto a single chip increases chip yield per wafer, boosting efficiency.
Citi has raised its target share price on TSMC by 7.7 percent to T$84, implying upside of 13 percent from Monday's close.
TSMC is set to report fourth-quarter earnings and give guidance for the first quarter of 2011 in late January. - Reuters
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