TSMC Reports Fourth Quarter EPS of NT$0.48

HSINCHU, Taiwan, Jan. 22 /PRNewswire-Asia-FirstCall/ -- TSMC (NYSE: TSM) today announced consolidated revenue of NT$64.56 billion, net income of NT$12.45 billion, and diluted earnings per share of NT$0.48 (US$0.07 per ADS unit) for the fourth quarter ended December 31, 2008.

Year-over-year, fourth quarter revenue decreased 31.2% while net income and diluted EPS decreased 63.9% and 62.3%, respectively. Compared to third quarter of 2008, fourth quarter results represent a 30.6% decrease in revenue, a decrease of 59.3% in net income, and a decrease of 59% in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

Triggered by a deepening economic recession worldwide and customers' inventory adjustment, fourth quarter saw a sharp decline in the demand for semiconductors across all applications. Gross margin for the quarter was 31.3%, operating margin was 18.6%, and net margin was 19.3%.

Advanced process technologies (0.13-micron and below) accounted for 65% of wafer revenues with 90-nanometer process technology accounting for 21% and 65- nanometer reaching 27% of total wafer sales.

"The global economic recession continues to worsen. Fourth quarter end- market sell-through was much below the already conservative expectations, and consumer demand remains very weak. This has led to a rising DOI for our customers, who continue to pare their inventories aggressively, resulting in a further significant cut back of wafer demand," said Lora Ho, VP and Chief Financial Officer of TSMC. "Based on our current business outlook, management expects overall performance for first quarter 2009 to be as follows":

    -- Revenue is expected to be between NT$32 billion and NT$35 billion;
    -- Gross profit margin is expected to be between 1% and 5%;
    -- Operating profit margin is expected to be between -19% and -15%.

Conference Call & Webcast Notice:

TSMC's quarterly review conference call will be held at 8 a.m. Eastern Time (9 p.m. Taiwan Time) on Thursday, January 22, 2009. The conference call will also be webcast live on the Internet. Investors wishing to access the live webcast should visit TSMC's web site at http://www.tsmc.com at least 15 minutes prior to the broadcast. Instructions will be provided on the web site to facilitate the download and installation of necessary audio applications. Investors without Internet access may listen to the conference call, in listen-only mode, by dialing 1-617-801-9714 in the U.S., 852-3002-1672 in Hong Kong, and 44-207-365-8426 in the U.K. (Password: TSMC). An archived version of the webcast will be available on TSMC's web site for six months following the Company's quarterly review conference call and webcast.


TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry's largest portfolio of process-proven libraries, IP, design tools and reference flows. The Company's total managed capacity in 2008 is to exceed nine million (8-inch equivalent) wafers, including capacity from two advanced 12-inch Gigafabs, four eight-inch fabs, one six-inch fab, as well as TSMC's wholly owned subsidiaries, WaferTech and TSMC (Shanghai), and its joint venture fab, SSMC. TSMC is the first foundry to provide 40nm production capabilities. Its corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please see http://www.tsmc.com .

                  -- Management Report and Tables Follow --

    TSMC 4Q08 Quarterly Management Report January 22, 2009

    Topics in This Report

    -- Revenue Analysis
    -- Profit & Expense Analysis
    -- Financial Condition Review
    -- Cash Flow
    -- CapEx & Capacity
    -- Recap of Recent Important Events & Announcements

    Operating Results Review:


    (Amounts are on consolidated basis
     and are in NT billions except
     otherwise noted)                     4Q08    3Q08   4Q07    2008    2007

    EPS (NT$ per common share)            0.48    1.18   1.29    3.83    4.06
        (US$ per ADR unit)                0.07    0.19   0.20    0.61    0.62

    Consolidated Net Sales               64.56   92.98  93.86  333.16  322.63
    Gross Profit                         20.19   43.09  44.84  141.75  142.35
    Gross Margin                         31.3%   46.3%  47.8%   42.5%   44.1%

    Operating Expense                    (8.17) (10.18) (8.08) (37.31) (30.63)
    Operating Income                     12.02   32.92  36.76  104.44  111.72
    Operating Margin                     18.6%   35.4%  39.2%   31.4%   34.6%
    Non-Operating Items                   1.07    1.51   2.57    7.04    9.92

    Net Income                           12.45   30.57  34.48   99.93  109.18
    Net Profit Margin                    19.3%   32.9%  36.7%   30.0%   33.8%

    Wafer Shipment (kpcs 8 inch-equiv.)  1,532   2,411  2,357   8,467   8,005

    Note: Total outstanding shares were 25,625mn units at 12/31/08

    Financial Highlights:

    Fourth Quarter 2008

    -- Consolidated net sales were NT$64.6 billion, declining 30.6% quarter-
       over-quarter and declining 31.2% year-over-year;
    -- Gross margin was 31.3%, a decrease by 15.0 percentage points from 3Q08.
       Operating margin was 18.6%, declined by 16.8 percentage points from
       3Q08. On a year-over-year basis, gross margin and operating margin
       declined by 16.5 and 20.6 percentage points respectively, although 4Q07
       results did not include the expensing of employee profit sharing;
    -- EPS was NT$0.48, with net profit margin of 19.3%

    Full Year 2008

    -- Consolidated net sales were NT$333.2 billion, up 3.3% from 2007;
    -- Gross margin and operating margin were 42.5% and 31.4%, declining 1.6
       and 3.2 percentage points from 2007 respectively. Notice however, 2007
       results did not include expensing of employee profit sharing;
    -- Earnings per share was NT$3.83, with net profit margin of 30.0%

    I.  Revenue Analysis

    I.  Wafer Sales Analysis

        By Application                      4Q08        3Q08        4Q07
        Computer                                                       32%                  33%                  35%
                Communication                                                43%                  41%                  42%
                Consumer                                                          19%                  20%                  15%
                Industrial/Others                                          6%                    6%                    8%

                By  Technology                                              4Q08                3Q08                4Q07
                65nm  and  below                                              27%                  25%                  10%
                90nm                                                                  21%                  26%                  29%
                0.11/0.13um                                                    17%                  15%                  20%
                0.15/0.18um                                                    22%                  22%                  27%
                0.25/0.35um                                                    10%                    9%                  10%
                0.50um+                                                              3%                    3%                    4%

                By  Customer  Type                                        4Q08                3Q08                4Q07
                Fabless/System                                              72%                  70%                  68%
                IDM                                                                    28%                  30%                  32%

                By  Geography                                                4Q08                3Q08                4Q07
                North  America                                                73%                  74%                  79%
                Asia  Pacific                                                  13%                  13%                  11%
                Europe                                                              11%                  10%                    8%
                Japan                                                                  3%                    3%                    2%


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