TSMC Reports 5% Sequential Increase in Second Quarter Revenue with EPS of NT$0.74

Hsinchu, Taiwan, R.O.C., July 26, 2005 -- TSMC today announced revenue and net income for the quarter ended June 30, 2005. Second quarter revenue reached NT$58.52 billion while net income and fully diluted earnings per share came to NT$18.37 billion and NT$0.74 per share (US$0.12 per ADS unit), respectively.

On a sequential basis, second quarter results represent a 5.1% increase in revenue, a 9.2% increase in net income and fully diluted EPS. Year-over-year comparison shows decreases in revenue, net income, and fully diluted EPS to be 9.8%, 21.5%, and 21.3%, respectively. All figures were prepared in accordance with R.O.C. GAAP on an unconsolidated basis.

The 5.1% increase in second quarter revenue mainly resulted from a 14.5% increase in wafer shipments and a 5.4% decline in average wafer selling price (ASP). Gross margin for the second quarter improved to 39.7% from the previous quarter’s 38.9%, due to higher levels of capacity utilization, but a lower ASP partially reduced the magnitude of the improvement. Revenues from advanced process technologies (0.13-micron and below) accounted for 43% of total wafer sales, compared to 45% previously. Net margin for the quarter improved to 31.4% from 30.2% in the last quarter.

“Due primarily to demand recovery from our customers, our second quarter business had improved better than we guided previously,” said Lora Ho, VP and Chief Financial Officer of TSMC. “We expect the recovery to continue for the coming quarter,” noted Ho,“and based on the current business outlook, management’s expectations for third quarter 2005 performance are the following”:

—Wafer shipments to increase by a mid-teen percentage point sequentially;

—Overall utilization rate to exceed 90%;

—Gross profit margin to be in the range of 41% to 43%;

—ASP to decline by a low to mid single digit percentage point sequentially.

TSMC’s 2005 second quarter results: (Unit: NT$ million, except for EPS)

 

2Q’05
Amount*

2Q’04
Amount

YoY
Inc. (Dec.) %

1Q’05
Amount

QoQ
Inc. (Dec.) %

Net sales

58,516

64,869

(9.8)

55,653

5.1

Gross profit

23,205

28,139

(17.5)

21,649

7.2

Income from operations

17,784

22,134

(19.7)

16,076

10.6

Income before tax

17,733

23,121

(23.3)

16,265

9.0

Net income

18,369

23,410

(21.5)

16,818

9.2

EPS(NT$)

0.74**

0.95***

(21.3)

0.68****

9.2

* 2005 second quarter figures have not been approved by Board of Directors
** Based on 24,687 million weighted average outstanding shares
*** Based on 24,770 million weighted average outstanding shares
****Based on 24,684 million weighted average outstanding share