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TSMC 2012 Q1 results: profits down again as 20-nanometer process proves expensive


Taiwan Semiconductor Manufacturing Co. has offered up its first quarter results for the year, revealing yet another middling quarter. While turnover was NT$105.51 billion ($3.6 billion) and net profit was NT$33.47 billion ($1.1 billion), that's still 7.7 percent down on the NT$36.28 it made in the same quarter last year. On the upside, the chip foundry, which produces silicon for plenty of the world's biggest electronics companies, managed to claw back some of those profit dips from Q4 of last year, suggesting milder climes may lie ahead.

The company is also encouraged by strong demand for its new 28-nanometer chips, which should offset the $8.5 billion spent on developing them, alongside a forthcoming 20-nanometer facility. 28-nanometer hardware still only equates to 5 percent of overall revenue, which should grow as companies use up their older inventory. If you've got a currency convertor to hand, head on past the break for the detailed breakdown.

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TSMC Reports First Quarter EPS of NT$1.29

Hsinchu, Taiwan, R.O.C., April 26, 2012 -- TSMC today announced consolidated revenue of NT$105.51 billion, net income of NT$33.47 billion, and diluted earnings per share of NT$1.29 (US$0.22 per ADR unit) for the first quarter ended March 31, 2012.

Year-over-year, first quarter revenue increased 0.1% while both net income and diluted EPS decreased 7.7%. Compared to fourth quarter of 2011, first quarter of 2012 results represent a 0.8% increase in revenue, and a 6% increase in both net income and diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

In US dollars, first quarter revenue increased 2.7% from the previous quarter and decreased 1.3% year-over-year.

Gross margin for the quarter was 47.7%, operating margin was 33.6%, and net margin was 31.7%.

28-nanometer process technology accounted for 5% of total wafer revenues, 40-nanometer was 32%, and 65-nanometer accounted for 26%. These advanced technologies accounted for 63% of total wafer revenues.

• Revenue is expected to be between NT$126 billion and NT$128 billion;
• Gross profit margin is expected to be between 47% and 49%;
• Operating profit margin is expected to be between 34.5% and 36.5%.

Due to stronger demand for TSMC's 28-nanometer technology and the pull-in of a 20-nanometer R&D process line, our estimate for 2012 capital expenditure is raised and is in the US$8-8.5 billion range.

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