TSMC Reports Fourth Quarter EPS of NT$1.57

Hsin-Chu, Taiwan, R.O.C., January 27, 2011 -- TSMC today announced consolidated revenue of NT$110.14 billion, net income of NT$40.72 billion, and diluted earnings per share of NT$1.57 (US$0.26 per ADR unit) for the fourth quarter ended December 31, 2010.

Year-over-year, fourth quarter revenue increased 19.6% while net income increased 24.7% and diluted EPS increased 24.6%. Compared to third quarter of 2010, fourth quarter results represent a 1.9% decrease in revenue, 13.2% decrease in net income and 13.3% decrease in diluted EPS. In US dollars, fourth quarter revenue grew 3.1% from third quarter 2010 and 27.2% year-over-year. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

Gross margin for the quarter was 49.8%, operating margin was 37.7%, and net margin was 37%.

Fourth quarter revenue and margins were obtained based on the exchange rate of NTD 30.4 to 1 USD, which is calculated based on a transaction-based weighted average of the NTD to USD exchange rate over the quarter.

In the fourth quarter, demand for TSMC’s wafers remained strong, with increases in wafer shipments in communication segment offsetting decreases in computer and consumer segments.

40-nanometer process technology accounted for 21% of total wafer revenues, 65-nanometer accounted for 31%. These advanced technologies exceeded 50% of total wafer sales for the first time and accounted for 52% of total revenues.

“For the first quarter of 2011, we expect the demand to be stronger than seasonal,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “Based on our current business outlook and exchange rate assumption, management expects overall performance for first quarter 2011 to be as follows”:

• Revenue is expected to be between NT$105 billion and NT$107 billion;
• Gross profit margin is expected to be between 47% and 49%;
• Operating profit margin is expected to be between 35% and 37%.

TSMC further expects 2011 capital expenditures to be about US$7.8 billion.