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To: Ramsey Su who started this subject5/2/2004 6:23:29 PM
From: Kent Rattey   of 147328
TSMC: Wafer Shipments, ASP to Increase

By Suzanne Deffree -- Electronic News, 4/30/2004

Taiwan Semiconductor Manufacturing Co. Ltd. today provided a Q2 guidance above expectations -- something one analyst said is good news for semi players.

The top foundry expects the June quarter to see wafer shipments increase close to 10 percent sequentially on Q1's 4 percent rise. Revenues from advanced technologies -- defined as 0.13-micron and below -- is forecasted to exceed 25 percent of wafer sales.

"An increase in 0.13-micron and below to over 25 percent of TSMC's revenue bodes well for potential margin expansion at semiconductor companies who invested in and will begin or continue to reap benefits of the more advanced process nodes," Tim Luke, a semi analyst at the Lehman Brothers, said in a research note. "We also note that ASP increases for now appear roughly in line with expectations and are likely due to the increased percentage of more expensive 300mm, 0.13-micron and below geometries that typically offer better margins for semiconductor companies."

TSMC predicted gross margin would also inch up from Q1's 39.3 percent. Meanwhile, ASPs are expected to improve by a single-digit percentage point, as TSMC's overall utilization rate may exceed 105 percent, the company said. Wafer ASPs fell 3.2 percent in Q1, TSMC said, noting that when combined with a 1.5 percent weaker U.S. dollar exchange rate, the March quarter's revenue came to a similar level of Q4 2003.

"We do not foresee rising ASPs affecting semiconductor cost structure meaningfully near term. However, we recognize that if utilization rates continue to remain high or trend higher, then ASPs may become more of an issue," Luke said.

Hopes were set high by TSMC based on its expected increase in demand from the consumer segment. Demand is expected to increase modestly in the communications segment, but decline modestly in the computer segment.

"Implications of these trends above expectations are likely to be viewed as constructive for our semiconductor group given recent weakness and suggest further evidence of rather broad-based demand trends in line with typical seasonality," the Lehman analyst said. "In particular these data points are constructive for PLD player Altera as well as wireless innovator Qualcomm, substantial customers of TSMC."

Looking at the full year, TSMC remained confident, predicting record-breaking financial performances in terms of both top-line and bottom-line results.

TSMC released its Q1 results earlier this week
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