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1998 Fourth
Quarter Financial Reports |
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Taiwan Semiconductor Manufacturing Company
Ltd. Announces
Fourth Quarter Results for the Period
Ended
December 31, 1998 |
| Hsin-Chu, Taiwan, R. O. C., January 26, 1998
!V Taiwan Semiconductor Manufacturing Company Ltd. (TAIEX: 2330,
NYSE: TSM), ("TSMC" or "the Company") the
world's largest dedicated semiconductor foundry company, announced
today the results of its operations for the fourth quarter ended
December 31, 1998. All figures were prepared in accordance with
generally accepted accounting principles in Taiwan. |
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| 4Q98 Results: Year-over-Year Comparison
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Highlights |
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Net sales declined
24.1% to NT$11,633 million. |
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Operating income declined 52.8%
to NT$2,893 million. |
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Net income declined 62.6% to
NT$2,524 million. |
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Diluted earnings per share (EPS)
declined 62.6% to NT$0.42 from NT$1.12. |
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Net Sales: |
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Net sales in 4Q98 totaled NT$11,633
million, down 24.1% compared with the same period of 1997,
as a combined result of lower unit sales of 8-inch equivalent
wafers and a lower average selling price (ASP). The unit
sales of 8-inch equivalent wafers fell 20.4% to 286.2K
units in 4Q98 from 359.4K in the same period of 1997.
Pure price erosion was 16.3%, which was offset by favorable
product mix and favorable foreign exchange rate. In US
dollar terms, quarterly ASP declined 10.1% to US$1,164
per 8" equivalent wafer. The ASP in the New Taiwan
dollar declined by 1.5% YoY. New Taiwan dollar depreciated
from the weighted average rate of NT$30.70 to NT$33.33
per US dollar during this period. |
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Gross Margins: |
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The gross margin declined to 33.8%
in 4Q98 compared with 53.1% in 4Q97 mainly due to price
erosion and lower capacity utilization. |
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Operating Expenses: |
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Operating expenses in the 4Q98 declined
48.6% from the same period a year ago to NT$1,040 million
due to cost control efforts. Operating expenses as percent
of net sales decreased to 8.9% in 4Q98 from 13.2% in the
same period of 1997.
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Non-Operating Income / Expenses: |
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Non-operating income increased to NT$514
million in 4Q98 from NT$62 million in 4Q97 due mainly
to NT$302 million foreign exchange gain and NT$224 million
proceeds from sale of equity holdings in Vanguard International
Semiconductor Company (VISC). Non-operating expenses increased
to NT$881 million from NT$219 million a year ago primarily
due to higher interest expenses (NT$123 million) and investment
losses of NT$610 million from VISC (NT$185 million) and
WaferTech (NT$425 million).2 Consequently, the profit
margin before tax declined to 21.7 from 38.9% a year ago. |
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Income Tax Credit (Expenses): |
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Net income tax expenses for 4Q98 was
NT$1 million, down from NT$790 million of income tax credit
in 4Q97 primarily due to lower capital expenditure and
investments. |
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Income Tax: |
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Net income declined 62.6% to NT$2,524
million in 4Q98. Diluted earnings per share were NT$0.42
for 4Q98, down from NT$1.12 in the same period of 1997.3 |
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Operations Highlights |
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During the 4Q98, average fab utilization
rate improved to 68% versus 58% in the 3Q98, due to mostly
seasonal factors. Sales to the fabless segment as percent
of total sales reach 76% (vs. 70% in 3Q98). Sales to North
America regions as percent of total sales continue to
rise, reaching 64% (vs. 60% in 3Q98). Product mix in logic
represented 91% of TSMC revenue, while memory represented
9%. Revenue breakdown by end market was computer 31%,
communication 26%, consumer 32%, and industrial/others
10%. |
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| 4Q98 Results: Sequential Comparison |
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Highlights |
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Net sales increased
3.3% to NT$11,633 million. |
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Operating income increased 2.3%
to NT$2,893 million. |
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Net income increased 19.4% to
NT$2,524 million. |
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Diluted earnings per share were
NT$0.42, an increase of 19.4% from NT$0.35. |
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Net Sales: |
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Net sales of 1998 totaled NT$50,233
million, up 14.3% from the previous year, as a combined
result from higher unit sales and higher ASP. The unit
sales of 8-inch equivalent wafers increased 2.8% to 1,176.6K
units in 1998 from 1,144.9K in 1997. Pure price erosion
was 16.3%, which was offset by favorable product mix and
foreign exchange rate. In the US dollar term, the ASP
declined by 2.8% to US$1,182. The ASP in the New Taiwan
dollar increased by 13.4%. The NT dollar depreciated against
US dollar from the weighted average rate of NT$28.55 to
NT$33.5 for the year. |
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Gross Margins: |
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The gross margin declined to 42.9%
in 1998 compared with 48.0% in 1997 mainly due to lower
capacity utilization from 102% to 74%. |
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Operating Expenses: |
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Operating expenses in 1998 decreased
4.7% to NT$5,339 million as a combined result of lower
SGA and higher R&D expenses. R&D expenses increased
by 29.6% to 3,246 million in 1998.
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Non-Operating Income/Expenses: |
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Non-operating income increased by 74.3%
(or NT$637 million) mainly due to NT$445 million proceeds
from the sale of holdings in Taiwan Mask Corporation,
Caesar Technology Inc., and VISC and NT$106 million foreign
exchange gain compared to NT$189 million FX loss in 1997.
NT$3,218 million increase in Non-operating expenses was
primarily due to NT$435 million increase in interest expenses
and NT$2,757 million of investment losses from VISC (NT$1,400
million) and WaferTech (NT$ 1,357 million). |
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Net Income: |
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Net income decreased 14.6% to NT$15.3
billion in 1998 from NT$18.0 billion in 1997. Diluted
EPS declined 14.6%for 1998 to NT$2.54 from NT$2.97 in
1997.4
Operations Highlights
Average fab utilization rate was 74% for 1998 versus
102% in 1997. Revenue breakdown by customer type was
fabless 71% (vs. 64% in 1997), IDM 27% (vs. 33% in 1997),
and system house 2% (vs. 2% in 1997). Revenue breakdown
by geographical market was North America 57% (vs. 46%
in 1997), Europe 11% (vs. 14% in 1997), Asia Pacific
27% (vs. 30% in 1997), and Japan 5% (vs. 11% in 1997).
Product mix in logic represented 82% of TSMC revenue,
while memory represented 18%. Revenue breakdown by end
market was computer 41% (vs. 55% in 1997), communication
21% (vs. 21% in 1997), consumer 29% (vs. 19% in 1997),
and industrial/others 8% (vs. 5% in 1997).
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Highlights |
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Net sales rose 14.3%
to NT$50.2 billion from NT$43.9 billion due to an
increase in unit sales and a higher ASP in New Taiwan
dollar terms. |
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Unit sales increased by 2.8%
and the ASP in NT dollar rose 13.4%. |
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Operating income rose 4.6% to
NT$16.2 billion from NT$15.5 billion. |
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Net income declined 14.6% to
NT$15.3 billion from NT$18.0 billion. |
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Diluted EPS for 1998 declined
14.6% to NT$2.54 from NT$2.97. 4 |
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| Company Description: |
| Founded in 1987, TSMC is the
first and largest semiconductor foundry company in the world.
The company is based in Taiwan's "Silicon Valley",
the Hsin-Chu Science-Based Industrial Park, and is dedicated
to providing manufacturing services for advanced integrated
circuits to fabless design houses and integrated device manufacturers
(IDM). The company operates two 6" wafer fabs and three
8" wafer fabs offering a comprehensive set of IC fabrication
processes, including processes to manufacture CMOS logic, mixed
mode, volatile and non-volatile memory and BiCMOS chips. In
mid-1996, TSMC began construction on the first-ever, pure-play
foundry in the US, WaferTech, in Camas, Washington, - a $1.2
billion joint venture. Production at WaferTech commenced in
June 1998, one month ahead of schedule. Fab 6 and 7 will be
located in the new Tainan Science-Based Industrial Park in Taiwan.
Corporate Headquarters:
Taiwan Semiconductor Manufacturing Company Ltd.
No. 121, Park Avenue III, Hsin-Chu Science-Based Industrial
Park
Hsin-Chu, Taiwan, R. O. C.
Tel: 886/3/578-0221
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