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Taiwan Semiconductor Manufacturing Co. Ltd. recorded a 17 percent increase in year-over-year sales in May on surging demand for the wafer foundry’s products and as the company continues to benefit from its R&D and next-generation capital equipment investments.
Total sales for May rose to NT$51.8 billion Taiwan dollar or approximately $1.73 billion, from NT$44.2 billion in the comparable month of 2012.
The company posted a 3.4 percent rise in sequential sales from the immediately preceding month but noted sales for the first five months of this year jumped 23.3 percent to NT$234.6 billion from NT$190.3 billion.
TSMC’s sales have jumped in the last few months on strong demand and the company expects the positive performance to continue for the rest of the year. It reported revenue of NT$132.8 billion for the first quarter of the year, well above its previous forecast for a range of NT$127 billion to NT$129 billion. It also matched or exceeded the gross profit margin and operating profit margin guidance.
“Our first quarter revenue turned out better than guidance, due to a more favorable exchange rate and stronger mobile demand and TSMC’s strong position in 28-nanometer,” said Lora Ho, CFO at TSMC during a conference held on April 18 to discuss the quarterly results.
Demand for foundry services have been rising across the electronics industry as more semiconductor companies engage with outsourced wafer providers to reduce capital expenditure and stay competitive in the capital-intensive market. With the cost of new semiconductor fabs well above $3 billion, few semiconductor companies have the resources to fund new plants while newer companies operate a largely fabless manufacturing model.
Morris Chang, TSMC’s chairman and CEO, said during the first quarter conference call with analysts that he expects the entire foundry market to expand 10 percent in 2010, building on a 9 percent rise in the fabless industry. Chang said he expects TSMC to grow at a faster rate than the industry average.
“Basically, I feel that the company is entering or has already entered a new growth period,” Chang added. “We started to invest in this growth period even at the depth of the recession in early 2009. We have been investing in increased R&D, in increased capital for several years now and we have begun to see the benefits.”
