TSMC net profits rise 28% in 3Q16

Pure-play foundry Taiwan Semiconductor Manufacturing Company (TSMC) saw its net profits surge 28.4% from a year earlier in the third quarter of 2016, while revenues increased 22.5% on year.

TSMC announced net profits of NT$96.76 billion (US$3.05 billion) on consolidated revenues of NT$260.41 billion for the third quarter of 2016, with EPS reaching NT$3.73 compared with NT$2.91 a year ago.

TSMC’s third-quarter revenues represented 17.4% sequential growth driven by "stronger-than-expected smartphone demand, partially offset by an unfavorable foreign exchange rate," the company said.

TSMC disclosed sales generated from the communication sector grew as a proportion of total wafer revenues to 60% in the third quarter, while the computer and industrial/standard segments were flat at 8% and 21%, respectively, on quarter. The consumer segment as a proportion of revenues slid 1pp sequentially to 11%.

Of TSMC’s total wafer revenues in the third quarter of 2016, 16/20nm accounted for a combined 31%, the foundry noted. Advanced technologies (28nm and below) accounted for 55% of TSMC’s total wafer revenues during the quarter.

Revenues from customers based in North America accounted for 68% of TSMC’s total wafer revenues in the third quarter of 2016 compared with 61% in the prior quarter and 69% a year ago, while Asia Pacific-based customers as a proportion of revenues reached 15%, down from 18% in the second quarter but up from 12% in the third quarter of 2015. Meanwhile, revenues from TSMC’s China-based customers accounted for 6% of revenues in the third quarter, compared with 10% in the prior quarter and 6% in third-quarter 2015.

TSMC’s gross margin came to 50.7% in the third quarter of 2016, 0.8pp lower than the prior quarter but 2.5pp higher than a year earlier, while operating margin slid 0.4pp on quarter but climbed 3.9pp on year to 40.8%.

TSMC also revealed its days-of-inventory (DOI) fell to 44 days in the third quarter from 54 days in the second, and the DOI for third-quarter 2016 went below the 59 days a year ago.

In addition, TSMC expects its 2016 capital budget to be slightly above US$9.5 billion. Capex for the first three quarters of the year already totaled NT$6.66 billion.

TSMC expects to post revenues of between NT$255 billion and NT$258 billion in the fourth quarter of 2016. The forecast is 1-2% lower than the prior quarter, but 25-27% higher than the same period in 2015.

Categories: Bits + chips IC manufacturing

Tags: 3Q16 4Q16 TSMC

Companies: Taiwan Semiconductor Manufacturing Company

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