TSMC Reports First Quarter EPS of NT$0.06

Revenue Analysis:

Application-First quarter revenue was NT$39.50 billion, better than the revised guidance, primarily due to continued rush orders from customers especially from the mainland Chinese market. In 1Q09, demand continued to be weaker across all applications compared to 4Q08. On a sequential basis, revenues from computer, communication, and consumer applications decreased 53%, 36%, and 32%, respectively.

Technology-Revenue from 45/40nm reached 1% of total wafer sales in 1Q09. Meanwhile, revenue from 65nm and 90nm were 23% and 25% of total wafer sales, respectively. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 65% of total wafer sales.

Customer-Revenues from IDM customers accounted for 23% of total wafer sales in 1Q09, lower than 28% in 4Q08, primarily due to increasing in-sourcing of those customers in the weak demand environment.

Geography-In 1Q09, revenues from customers based in North America accounted for 68% of total wafer sales, lower than 72% in 4Q08. Meanwhile, sales from customers in Asia Pacific, China, Europe, and Japan accounted for 14%, 3%, 12% and 3% of wafer sales, respectively.



    II. Profit & Expense Analysis

    II - 1. Gross Profit Analysis

    (In NT billions)                            1Q09        4Q08        1Q08

    COGS                                       32.02       44.37       49.24
    Depreciation                               18.97       19.29       18.12
    Other MFG Cost                             13.05       25.08       31.12

    Gross Profit                                7.48       20.19       38.24

    Gross Margin                               18.9%       31.3%       43.7%

Gross Profit Analysis:

Gross margin in 1Q09 was 18.9%, down 12.4 percentage points from 4Q08, mainly driven by a sharp decline of production activities, partially balanced by cost improvement, a more favorable exchange rate, and less employee profit sharing expenses.



    II - 2. Operating Expenses

    (In NT billions)                            1Q09        4Q08        1Q08

    Total Operating Exp.                        6.27        8.17        9.12
    SG&A                                        2.54        3.34        3.85
    Research & Development                      3.73        4.83        5.27
    Total Operating Exp. as a % of Sales       15.9%       12.7%       10.4%

Operating Expenses:

Total operating expenses for 1Q09 decreased to NT$6.27 billion, representing 15.9% of net sales, higher than 12.7% of net sales in 4Q08.

Research and development expenditures decreased by NT$1.10 billion sequentially, mainly due to lower level of employee profit sharing and less development expenses related to 40nm technologies.

SG&A expenses decreased by NT$0.80 billion from 4Q08 level. The decrease was mainly due to lower level of employee profit sharing and more stringent expense control.



    II - 3. Non-Operating Items

    (In NT billions)                            1Q09        4Q08       1Q08

    Non-Operating Inc./(Exp.)                   0.35        1.41       1.87
       Net Interest Income/(Exp.)               0.88        1.18       1.19
       Other Non-Operating                     (0.53)       0.23       0.68

    L-T Investments                            (0.81)      (0.34)      0.58
       SSMC                                    (0.32)      (0.07)      0.38
       Others                                  (0.49)      (0.27)      0.20

    Total Non-Operating Items                  (0.46)       1.07       2.45

Non-Operating Items:

For 1Q09, combined result from non-operating income and long-term investment losses was a net loss of NT$0.46 billion.

Non-operating income was NT$0.35 billion, lower than NT$1.41 billion in 4Q08, primarily due to less interest income, disposal and impairment losses of financial assets, and the absence of litigation compensation.

Net investment losses increased by NT$0.47 billion to NT$0.81 billion, mainly due to weaker business in VIS and SSMC.



    III. Financial Condition Review

    III - 1. Liquidity Analysis
             (Selected Balance Sheet Items)

    (In NT billions)                          1Q09        4Q08        1Q08

       Cash  &  Marketable  Securities                        229.79            211.45            210.31
        Accounts  Receivable  -  Trade                            13.82              18.50              37.95
        Inventory                                                                14.78              14.88              21.89
        Total  Current  Assets                                        268.56            252.62            281.46
        Accounts  Payable                                                  10.97              14.04              22.59
        Current  Portion  of  Bonds  Payable                    0.00                8.00                8.00
        Accrued  Bonus  to  Employees,
          Directors  and  Supervisors                              15.64              15.37                4.37
        Accrued  Liabilities  and  Others                      18.76              19.40              27.08
        Total  Current  Liabilities                                45.37              56.81              62.04
        Current  Ratio  (x)                                                    5.9                  4.4                  4.5
        Net  Working  Capital                                          223.19            195.81            219.42

 


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