LONDON: Pure-play foundry Taiwan Semiconductor Manufacturing Company (TSMC) saw its net profits decrease 8.7% from a year earlier in the second quarter of 2016 though revenues for the quarter increased 8% on year.
TSMC has reported consolidated revenues of NT$221.81 billion (US$6.91 billion) for the second quarter of 2016, up 9% on quarter and 8% on year. Gross margin for the quarter was 51.5%, 6.6pp higher than the prior quarter and 3.0pp above the level of a year ago. TSMC credited the sequential revenue growth in the second quarter to customers’ inventory restocking and preparation for new product launches, and recovery of the delayed shipments from the February 6 earthquake.
TSMC disclosed sales generated from the communication sector went flat sequentially in the second quarter, while the computer, consumer and industrial/standard segments increased 19%, 80% and 12%, respectively. Of TSMC’s total wafer revenues in the second quarter of 2016, 16/20nm accounted for a combined 23%. Advanced technologies (28nm and below) accounted for 51% of TSMC’s total wafer revenues during the quarter.
Revenues from customers based in North America accounted for 61% of TSMC’s total wafer revenues in the second quarter of 2016 compared with 66% a year ago, while Asia Pacific-based customers as a proportion of company revenues reached 18% from 13% in the second quarter of 2015. Meanwhile, revenues from TSMC’s China-based customers accounted for 10% of the foundry’s total wafer revenues in the second quarter, up from 8% during the same period in 2015.
TSMC generated net profits of NT$72.51 billion in the second quarter of 2016, up 11.9% sequentially but down 8.7% from 2015. “If the non-recurring gains in 2Q15 were excluded, 2Q16 net income and diluted EPS would have both increased by 17.2% year-over-year,” the company said.
TSMC disclosed its non-operating items were a gain of NT$2.09 billion in the second quarter compared with a gain of NT$21.06 billion in the second quarter of 2015. The decrease mainly reflected the disposal gains of ASML shares in the second quarter of 2015, the foundry noted. TSMC posted diluted earnings per share of NT$2.80 (US$0.43 per ADR unit) for the quarter ended June 30, 2016, compared with NT$2.50 in the prior quarter and NT$3.06 a year earlier.
TSMC also revealed its days-of-inventory (DOI) in the second quarter stayed flat sequentially at 54 days, but went below the 62 days a year ago. In addition, TSMC now expects its 2016 capital budget to be between US$9.5 billion and US$10.5 billion. The foundry previously estimated US$9-10 billion in capex this year.
