TSMC Reports Second Quarter EPS of NT$1.61

Hsinchu, Taiwan, R.O.C., July 19, 2012 -- TSMC today announced consolidated revenue of NT$128.06 billion, net income of NT$41.81 billion, and diluted earnings per share of NT$1.61 (US$0.27 per ADR unit) for the second quarter ended June 30, 2012.

Year-over-year, second quarter revenue increased 15.9% while both net income and diluted EPS increased 16.3%. Second quarter results included an impairment charge of NT$2.68 billion, equivalent to NT$0.09 EPS, of our holding of 5.6% stake of SMIC common stocks. Compared to first quarter of 2012, second quarter of 2012 results represent a 21.4% increase in revenue, and a 24.9% increase in both net income and diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

In US dollars, second quarter revenue increased 21.8% from the previous quarter and increased 13.0% year-over-year.

Gross margin for the quarter was 48.6%, operating margin was 36.5%, and net margin was 32.7%.

28-nanometer process technology accounted for 7% of total wafer revenues, meeting our internal plan. 40-nanometer accounted for 28% of total wafer revenues, and 65-nanometer was 26%. These advanced technologies accounted for 61% of total wafer revenues.

“Due to continuing strong demand for our 28-nanometer technology, we expect to double the shipments of 28-nanometer in the third quarter. This increase in 28nm business will account for more than 80% of revenue growth in the third quarter,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “Based on our current business outlook and exchange rate assumption of 1 US dollar to 29.76 NT dollars, management expects overall performance for third quarter 2012 to be as follows”:

• Revenue is expected to be between NT$136 billion and NT$138 billion;
• Gross profit margin is expected to be between 46% and 48%;
• Operating profit margin is expected to be between 34% and 36%.