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TSMC Reports Second Quarter EPS of NT$1.32


Hsin-Chu, Taiwan, R.O.C., July 27, 2006 -- TSMC today announced consolidated revenue of NT$82.12 billion, net income of NT$34 billion, and fully diluted earnings per share of NT$1.32 (US$0.20 per ADS unit) for the second quarter ended June 30, 2006.

Year-over-year, second quarter revenue increased 36.9% while net income and fully diluted EPS increased 85.1% and 84.8%, respectively. On a sequential basis, second quarter results represent a 5.5% increase in revenue, and a 4.3% increase in net income and in fully diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

As a result of stronger demand in certain product segments, second quarter revenue reached beyond the high end of guidance. Advanced process technologies (0.13-micron and below) accounted for 49% of wafer revenues while revenues from 90-nanometer process technology alone was 24% of the total wafer sales. Gross margin rose from 48.5% in the previous quarter to 51.8% in the second quarter. Operating margin was 43% compared to 39.7% in the previous quarter, while net margin decreased slightly to 41.4% from 42% quarter over quarter.

“Driven primarily by sequentially stronger demand from our customers in communications and consumer segments, our second quarter business rose 5.5% amid weaker demand from our customers in the computer segment,” said Lora Ho, VP and Chief Financial Officer of TSMC. “Going forward, however, we expect the overall demand in the third quarter to be level or slightly down from the second quarter, in response to the correction of inventory in the supply chain,” said Ho. “Based on our current business outlook, management’s expectations for third quarter 2006 performance are as follows”:

· Revenue to be between NT$79 billion and NT$82 billion;

· Gross profit margin to be between 48% and 50%;

· Operating profit margin to be between 39% and 41%.


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