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Taiwan chipmaker TSMC says facing challenging 1st quarter after profit fall in 4th quarter

Taiwan chipmaker TSMC says facing challenging 1st quarter after profit fall in 4th quarter

Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker by revenue, said Thursday it was facing a challenging first quarter after posting a 17.7 percent decline in its fourth-quarter profit.
TSMC reported a fourth-quarter net profit of 27.91 billion New Taiwan dollars (US$849.82 million; euro654.07 million), down from NT$33.9 billion for the last quarter of 2005.
The company's clients had ordered fewer chips from TSMC as they brought down excess inventories, chief executive officer Rick Tsai told an investor meeting in Taipei.
"We face a challenging first quarter, but we believe we will recover by the end of the period," Tsai said.
High inventories of chips for cell phones and personal computers were expected to return to normal, lower levels by the end of the first quarter, he said.
Tsai predicted revenue growth of around 5 percent for the semiconductor industry this year, compared to an increase of 8 to 9 percent in 2006.
TSMC's revenue for the fourth quarter totaled NT$74.96 billion (US$2.28 billion; euro1.75 billion), down 5.4 percent from NT$79.23 billion in the same period one year earlier, the company said.
Net profit for all of 2006 hit a record NT$127.01 billion (US$3.86 billion; euro2.97 billion), up 35.7 percent from NT$93.58 billion for the year before, TSMC said.
Revenue for the past year rose 19.1 percent to NT$317.4 billion (US$9.66 billion; euro7.43 billion) from NT$266.56 billion in 2005.
Tsai said TSMC was unlikely to follow the example of its smaller competitor, United Microelectronics Corp., in reducing its number of shares and returning cash to investors.
"We do not rule out (cutting the number of shares) in the future, but right now it's not on the front burner," he said.
UMC announced Tuesday it was planning to cut its number of shares by 30 percent, paying NT$57.39 billion (US$1.74 billion; euro1.34 billion) to investors.
TSMC and UMC supply chips to several of the biggest companies in the global high-tech sector for use in a variety of products including mobile phones, digital cameras and computers.


Updated : 2021-04-22 08:19 GMT+08:00