Taiwan Semiconductor Manufacturing Company (TSMC) expects its fourth-quarter revenues to decline about 10.5% sequentially, due to an inventory correction currently experienced by the IC supply chain and weakening demand for certain high-end mobile devices.
The industry continues to be engaged in the process of inventory adjustment, according to TSMC chairman and CEO Morris Chang. However, the supply chain DOI is expected to fall significantly in the fourth quarter and approach seasonal levels by quarter-end, said Chang.
TSMC reported net profits of NT$51.95 billion (US$1.74 billion), or NT$2 per share, on consolidated revenues of NT$162.58 billion for the third quarter of 2013.
"TSMC again set new record in both revenue and net income in the third quarter, thanks to our leadership in advanced technologies," said company CFO Lora Ho. "We expect our fourth quarter to be impacted by softer demand for certain high-end mobile devices and the inventory correction resulting from such softer demand."
TSMC has guided its fourth-quarter consolidated revenues to be between NT$144 billion and NT$147 billion. Gross margin and operating margin are estimated at 44-46% and 32-34%, respectively.
For all of 2013, TSMC forecast its consolidated revenues will enjoy growth of 17-18% outperforming the global IC foundry market. TSMC predicted the global IC foundry market will log an 11% increase in 2013 while the overall semiconductor market is set to grow by a smaller 4%.
In addition, Chang noted that TSMC's 20nm process has received product tape-outs from mobile computing, CPU and PLD companies. TSMC will ramp up its 20nm production capacity at a faster pace than 28nm process nodes, Chang said.
The contribution made by the newer 20nm process to TSMC's overall revenues in 2014 is expected to be bigger than that made by 28nm processes in 2012, Chang indicated.
TSMC disclosed that shipments of 28nm process technology reached 32% of the foundry's total wafer revenues in the third quarter of 2013, compared to 13% a year earlier. Advanced technologies, defined as 40/45nm and more advanced processes, accounted for a combined 52% of TSMC's total wafer revenues in the third quarter.
As for 16nm FinFET, Chang reiterated his previous remark that the process will enter mass production in about one year after ramping up production of 20nm chips. TSMC's 16nm FinFET will enter risk production by the end of 2013, Chang added.
