As a result of continued strong ramp for our 65nm technology, revenue from 65nm reached 18% of total wafer sales during the quarter, up from 15% in the previous quarter. Meanwhile, revenue from 90nm remained strong at 28% of total wafer sales. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 63% of total wafer sales.
Revenues from IDM customers accounted for 29% of total wafer sales in 2Q08, flat from 1Q08.
From a geographic perspective, revenues from customers based in North
America accounted for 73% of total wafer sales. Meanwhile, sales from
customers in Asia Pacific, Europe and Japan accounted for 13%, 11% and 3% of
wafer sales, respectively.
I. Wafer Sales Analysis
By Application 2Q08 1Q08 2Q07
Computer 31% 34% 29%
Communication 41% 42% 44%
Consumer 21% 17% 18%
Industrial/Others 7% 7% 9%
By Technology 2Q08 1Q08 2Q07
65nm and below 18% 15% 3%
90nm 28% 28% 26%
0.11/0.13um 17% 20% 24%
0.15/0.18um 23% 23% 30%
0.25/0.35um 10% 10% 12%
0.50um+ 4% 4% 5%
By Customer Type 2Q08 1Q08 2Q07
Fabless/System 71% 71% 68%
IDM 29% 29% 32%
By Geography 2Q08 1Q08 2Q07
North America 73% 76% 74%
Asia Pacific 13% 12% 13%
Europe 11% 9% 9%
Japan 3% 3% 4%
II. Profit & Expense Analysis
Gross Profit Analysis:
Gross margin in 2Q08 was 45.6%, up 1.9 percentage points from the previous quarter, reflecting the significant cost improvement and higher levels of wafer movements, partially offset by a continued unfavorable change of the exchange rate.
II -- 1. Gross Profit Analysis
(In NT billions) 2Q08 1Q08 2Q07
COGS 47.9 49.2 42.7
Depreciation 18.2 18.1 17.9
Other MFG Cost 29.7 31.1 24.8
Gross Profit 40.2 38.2 32.2
Gross Margin 45.6% 43.7% 43.0%
Operating Expenses:
Total operating expenses for 2Q08 increased by 8.0% sequentially to reach NT$9.8 billion, or 11.1% of net sales, compared with 10.4% of net sales in the previous quarter.
Research and development expenditures increased by NT$134 million quarter- over-quarter, mainly due to 32nm technology development and 45nm technology transfer.
SG&A expenses increased by NT$598 million from the previous quarter, primarily due to the start-up cost for the accelerating ramp-up of Fab 14 Phase 3, the promotion expenses for world-wide technology marketing activities, and an accrual for higher legal litigation fees.
II -- 2. Operating Expenses
(In NT billions) 2Q08 1Q08 2Q07
Total Operating Exp. 9.85 9.12 7.45
SG&A 4.45 3.85 3.15
Research & Development 5.40 5.27 4.30
Total Operating Exp.
as a % of Sales 11.1% 10.4% 10.0%
