Market Intelligence

TSMC Q4 Net Income Edges Up On Higher Demand; Warns On Q1

( - Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) on Thursday reported that its fourth-quarter net income was NT$99.98 billion or NT$3.86 per share, 0.7 percent higher than last year's NT$99.29 billion or NT$3.83 per share.

Earnings per ADR unit was $0.63 for the fourth quarter.

Consolidated net sales were NT$289.77 billion, 4.4% higher than NT$277.57 billion last year. In US dollars, fourth quarter revenue was $9.40 billion, which increased 2% year-over-year.

Gross margin for the quarter was 47.7%, operating margin was 37.0%, and net profit margin was 34.5%.

In the fourth quarter, shipments of 7-nanometer accounted for 23% of total wafer revenue.

"Our fourth quarter business benefited from the strong demand for our 7 nanometer technology covering both mobile and high performance computing applications," said Lora Ho, SVP and Chief Financial Officer of TSMC.

Looking ahead, based on the current business outlook, the company expects the first quarter 2019 revenue to be between $7.3 billion and $7.4 billion. Gross profit margin is expected to be between 43% and 45%; and operating profit margin is expected to be between 31% and 33%.

The company said the business in first quarter will be dampened by the overall weakening of the macroeconomic outlook, mobile product seasonality, and high levels of inventory in the semiconductor supply chain.

The management further expects the 2019 capital budget to be between $10 billion and $11 billion.

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