Chipmaker TSMC’s profits highest since 2001

TAIPEI, Taiwan — Battling through an ongoing slump in the chip sector, Taiwan Semiconductor Manufacturing Corp. (TSMC), the world’s largest contract chipmaker, saw sales and profits grow during the second quarter as its capacity utilization rate rose higher.

TSMC’s second-quarter net income, which reached NT$11.7 billion ($337.5 million on June 30, the last day of the period being reported), was the highest for any quarter since the chip sector’s downturn began in 2001, the company said in a statement Thursday. While TSMC’s outlook for the third quarter is optimistic, it stopped short of declaring an end to the downturn.

Net income at the Hsinchu, Taiwan, company rose 26 percent compared to the same period last year, when it reported net income of NT$9.3 billion. Net sales for the second quarter rose 13 percent to NT$49.9 billion, up from 44.2 billion for the same period last year.

Advanced chip-making processes played an important part in TSMC’s strong results. Chips made using the most advanced processes — 130 nanometers, 150 nanometers, and 180 nanometers — accounted for 62 percent of TSMC’s second-quarter sales, up from 52 percent one year earlier.

The greatest increase came from production using the 130-nanometer process, which contributed 17 percent of sales during the second quarter, up from 1 percent during the same period last year.

TSMC saw its overall capacity utilization rate, which factors in the utilization rates at its affiliates, reach 88 percent during the period. That is a sharp increase over the fourth quarter of last year and the first quarter of this year, when utilization rates hit 69 percent and 70 percent, respectively. It matches the 88 percent reported for the second quarter last year.

Looking ahead, TSMC expects to see its capacity utilization rise to more than 90 percent during the third quarter with wafer shipments growing in the mid- to high single digit percentages, the company said in a statement. Those increases will be driven by rising demand for chips used in communications and consumer electronics applications, offsetting an expected drop in demand for chips used in PCs, the company said.