TSMC chief forecasts 2012 IC sector growth of only 2%

Chang made the remarks at the firm's investors' conference yesterday.

Last year, the global IC industry saw almost zero growth, while the segment for contract manufacturing grew four percent, he said.

This year, contract chip-making will grow more than the IC industry as a whole, while TSMC will grow more than the contract chip manufacturing sector, he said.

The firm will slash its capital expenditure from US$7.286 billion last year to US$6 billion this year, a margin of 17.65 percent, he said.

During the event, TSMC reported fourth quarter net profit of NT$31.578 billion, a rise of 3.9 percent quarter-on-quarter. Gross profit margin was 44.7 percent and operating margin 31.4 percent, an increase of 2.7 percent and 1.7 percent from the third quarter, respectively. Earnings per share were NT$1.22.

For the entire last year, net profit was NT$134.2 billion, translating into a decline of 17 percent from 2010 and earnings per share of NT$5.18, in line with market expectations. Gross profit margin was 45.4 percent, down 4 percent from 2010.

In terms of sales, TSMC posted consolidated sales of NT$427 billion in 2011, a rise of 1.8 percent from 2010 and breaking records for two years in a row. In the fourth quarter last year, the firm had consolidated sales of NT$104.7 billion, down 1.7 percent from the third quarter and hitting the firm's own target.

For the first quarter, TSMC is expected to see sales pretty much stay the same as the fourth quarter, Chang said. Yet for the second quarter, sales will see strong growth over the first three months, he added.

Consolidated sales are expected to fall between NT$103 billion and NT$105 billion in the first quarter, the firm's chief finance officer Ho Li-mei said.

Their remarks were in line with analysts' expectations. Tuesday, Samsung Securities forecasted that TSMC will have a typical first quarter, yet sales will pick up starting in the second quarter on strong demands, especially for the firm's 28-nanometer and 40-nm capacity.

HSBC, meanwhile, had predicted sales for the first three months will stay the same as the fourth quarter last year, based on the TSMC's orders and capacity utilization.

TSMC bucked a downward trend of the TAIEX, which has fallen from a high of 8,600 since August last year. The chipmaker had at one point risen 19 percent, outperforming the five percent for the weighted index.

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