Year-over-year, second quarter revenue increased 17.6% while net income and diluted EPS increased 12.9% and 16.3%, respectively. On a sequential basis, second quarter results represent a 0.8% increase in revenue, an increase of 2.2% in net income, and an increase of 2.1% in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.
Second quarter business saw an improvement from the previous quarter, although revenue and margins continued to be negatively affected by the strength of the NT dollar. Despite the negative impact from the foreign exchange rate, our margins have exceeded guidance due to significant cost improvement and higher levels of wafer movements. Second quarter gross margin was 45.6%, operating margin was 34.5%, and net margin was 32.6%.
Advanced process technologies (0.13-micron and below) accounted for 63% of wafer revenues with 90-nanometer process technology accounting for 28% and 65- nanometer reaching 18% of total wafer sales.
"Even with a weakening macroeconomic environment, our second quarter results were either in line with or slightly higher than guidance announced at the end of April, thanks to our continual effort in driving cost reduction and increasing utilization rates," said Lora Ho, VP and Chief Financial Officer of TSMC. "Based on our current business outlook, management expects third quarter revenue growth to be below seasonality. Management further expects overall performance for third quarter 2008 to be as follows":
-- Revenue is expected to be between NT$90 billion and NT$92 billion;
-- Gross profit margin is expected to be between 45% and 47%;
-- Operating profit margin is expected to be between 34% and 36%.
Conference Call & Webcast Notice:
TSMC's quarterly review conference call will be held at 8 a.m. Eastern Time (8 p.m. Taiwan Time) on Thursday, July 31, 2008. The conference call will also be webcast live on the Internet. Investors wishing to access the live webcast should visit TSMC's web site at http://www.tsmc.com at least 15 minutes prior to the broadcast. Instructions will be provided on the web site to facilitate the download and installation of necessary audio applications. Investors without Internet access may listen to the conference call, in listen-only mode, by dialing 1-617-614-3452 in the U.S., 852-3002-1672 in Hong Kong, 65-6823-2164 in Singapore, and 44-207-365-8426 in the U.K. (Password: TSMC). An archived version of the webcast will be available on TSMC's web site for six months following the Company's quarterly review conference call and webcast.
Profile
TSMC (NYSE: TSM) is the world's largest dedicated semiconductor foundry, providing the industry's leading manufacturing capacity, process technology, and the foundry industry's largest portfolio of process- proven libraries, IP, design tools and reference flows. TSMC currently operates two twelve-inch wafer fabs, four eight-inch fabs, and one six-inch fab. The Company also operates two eight-inch fabs at its wholly owned subsidiaries, WaferTech in the U.S. and TSMC (Shanghai) Company, Ltd. in China, and has substantial capacity commitments from a joint-venture fab, SSMC, in Singapore. Total managed capacity in 2007 exceeds eight million eight-inch equivalent wafers. TSMC is the first foundry to provide 65-nanometer production capabilities. TSMC's corporate headquarters are in Hsin-Chu, Taiwan. More information about TSMC is available at http://www.tsmc.com .
-- Management Report and Tables Follow --
TSMC 2Q08 Quarterly Management Report July 31, 2008
Topics in This Report
-- Revenue Analysis
-- Profit & Expense Analysis
-- Financial Condition Review
-- Cash Flow
-- CapEx & Capacity
-- Recap of Recent Important Events & Announcements
Operating Results Review:
Summary:
(Amounts are on consolidated basis
and are in NT billions except
otherwise noted) 2Q08 1Q08 2Q07 QoQ YoY
EPS (NT$ per common share) 1.12 1.10 0.96 2.1% 16.3%
(US$ per ADR unit) 0.18 0.17 0.15 -- --
Consolidated Net Sales 88.14 87.48 74.92 0.8% 17.6%
Gross Profit 40.22 38.24 32.18 5.2% 25.0%
Gross Margin 45.6% 43.7% 43.0% -- --
Operating Expense (9.85) (9.12) (7.45) 8.0% 32.3%
Operating Income 30.37 29.12 24.73 4.3% 22.8%
Operating Margin 34.5% 33.3% 33.0% -- --
Non-Operating Items 2.00 2.45 3.29 (18.2%) (39.1%)
Net Income 28.77 28.14 25.48 2.2% 12.9%
Net Profit Margin 32.6% 32.2% 34.0% -- --
Wafer Shipment
(kpcs 8 inch-equiv.) 2,329 2,196 1,856 6.0% 25.5%
Remarks:
The diluted earnings per share in 2Q08 were NT$1.12, representing an increase of 16.3% over the same period last year and an increase of 2.1% from the previous quarter. The consolidated operating results of 2Q08 are summarized below:
Net sales in the second quarter were NT$88.1 billion, up 17.6% from NT$74.9 billion in 2Q07 and up 0.8% from NT$87.5 billion in 1Q08.
Gross profit for the quarter was NT$40.2 billion with gross margin of 45.6%, 1.9 percentage points higher than the 43.7% gross margin in 1Q08, mainly due to significant cost improvement and higher levels of wafer movements but partially offset by an unfavorable change of the exchange rate.
Operating expenses, including expenses accrued for employee profit sharing, were NT$9.8 billion or 11.1% of net sales. The combined result from non- operating income and long-term investments was a gain of NT$2.0 billion.
Consolidated net income attributable to shareholders of the parent company, including an accrual of employee profit sharing, was NT$28.8 billion, up 12.9% from a year ago level and up 2.2% from the previous quarter. Net profit margin was 32.6% for 2Q08.
I. Revenue Analysis:
In-line with our guidance, the second quarter 2008 revenue reached NT$88.1 billion. 2Q08 business saw a solid improvement but revenue was negatively impacted by a 3.7% appreciation in the NT dollar against the US dollar. Demand from consumer related applications grew but communication and computer applications declined during the quarter. On a sequential basis, revenue from consumer applications increased 24%, while revenues for communication and computer applications declined 2% and 8%, respectively.
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%
Non-Operating Items:
Combined result from non-operating income and long-term investments income was a gain of NT$2.0 billion for the second quarter 2008.
Non-operating income was NT$1.7 billion, slightly down from NT$1.8 billion in the previous quarter.
Net investment income decreased by NT$298 million in the quarter to NT$279 million.
II -- 3. Non-Operating Items
(In NT billions) 2Q08 1Q08 2Q07
Non-Operating Inc./(Exp.) 1.7 1.8 2.8
Net Interest Income/(Exp.) 1.2 1.2 1.3
Other Non-Operating 0.5 0.6 1.5
L-T Investments 0.3 0.6 0.5
SSMC 0.3 0.4 0.2
Others (0.0) 0.2 0.3
Total Non-Operating Items 2.0 2.4 3.3
The Impact of Employee Profit Sharing:
Total impact from employee profit sharing expensing (PSE) on gross margin in 2Q08 was 2.6 percentage points, slightly up from the level in previous quarter.
Similarly, total PSE impact on operating margin was 4.9 percentage points
in 2Q08.
II -- 4. PSE Impact
2Q08 1Q08 2Q07
Gross Margin w/ PSE 45.6% 43.7% 38.5%
Gross Margin w/o PSE 48.2% 46.2% 43.0%
PSE Impact -2.6% -2.5% -4.5%
Operating Margin w/ PSE 34.5% 33.3% 24.3%
Operating Margin w/o PSE 39.4% 38.1% 33.0%
PSE Impact -4.9% -4.8% -8.7%
* PSE: Profit Sharing Expenses
** 2007 PSE impact is estimated using the 6/12/2008 closing share price
adjusted for dividends
III. Financial Condition Review
Liquidity Analysis:
At the end of 2Q08, total current assets increased by NT$ 18.3 billion to reach NT$299.8 billion, mainly due to the increase of NT$13.7 billion in cash and marketable securities.
Total current liabilities increased by NT$84.9 billion in 2Q08, primarily due to higher accruals of NT$ 77.0 billion and NT$8.6 billion payables for cash dividends and bonuses of employees, directors, and supervisors, respectively.
Net working capital was NT$152.8 billion at the end of the quarter, current ratio declined to 2.0.
III -- 1. Liquidity Analysis (Selected Balance Sheet Items)
(In NT billions) 2Q08 1Q08 2Q07
Cash & Marketable Securities 224.0 210.3 233.1
Accounts Receivable -- Trade 41.9 38.0 37.1
Inventory 23.4 21.9 24.0
Total Current Assets 299.8 281.5 304.6
Accounts Payable 21.1 22.6 28.2
Current Portion of Bonds Payable 8.0 8.0 4.5
Dividends Payable 77.0 0.0 77.5
Accrued Bonus to Employees,
Directors and Supervisors 13.0 4.4 4.6
Accrued Liabilities and Others 27.9 27.0 17.6
Total Current Liabilities 147.0 62.0 132.4
Current Ratio (x) 2.0 4.5 2.3
Net Working Capital 152.8 219.4 172.2
Receivable and Inventory Days:
Sequentially, days of receivable decreased by one day to 42 days in 2Q08 while days of inventory increased by one day to 47 days.
III -- 2. Receivable/Inventory Days
(In Number of Days)
2Q08 1Q08 2Q07
Days of Receivable 42 43 44
Days of Inventory 47 46 52
Debt Service:
Net cash reserves -- defined as the excess of cash and short-term marketable securities over interest-bearing debt -- increased by NT$13.7 billion to NT$201.1 billion at the end of 2Q08.
III -- 3. Debt Service
(In NT billions) 2Q08 1Q08 2Q07
Cash & Marketable Securities 224.0 210.3 233.1
Interest-Bearing Debt 22.9 22.9 26.3
Net Cash Reserves 201.1 187.4 206.8
Cash Flow
Summary of Cash Flow:
Cash generated from operating activities totaled NT$45.0 billion during the quarter, down from NT$57.3 billion in 1Q08, mainly due to tax payment of NT$10.0 billion and inventory increase of NT$1.5 billion.
Net cash generated in investing activities was NT$3.6 billion in 2Q08, reflecting capital expenditure of NT$22.3 billion and a net increase of NT$27.2 billion in marketable financial instruments.
Net cash used in financing activities was NT$6.8 billion during the quarter, as we spent NT$6.6 billion in share buyback.
As a result, TSMC ended the quarter with a cash balance of NT$185.3 billion.
IV -- 1. Cash Flow Analysis
(In NT billions) 2Q08 1Q08 2Q07
Net Income 28.8 28.1 25.5
Depreciation & Amortization 20.0 19.8 19.6
Other Operating Sources/(Uses) (3.8) 9.4 (10.4)
Total Operating Sources/(Uses) 45.0 57.3 34.7
Capital Expenditure (22.3) (15.3) (25.3)
Marketable Financial Instruments 27.2 12.9 15.8
Other Investing Sources/(Uses) (1.3) (0.7) (0.7)
Net Investing Sources/(Uses) 3.6 (3.1) (10.2)
Purchase of Treasury Stock (6.6) (3.1) 0.0
Other Financing Sources/(Uses) (0.2) (0.2) (0.5)
Net Financing Sources/(Uses) (6.8) (3.3) (0.5)
Net Cash Position Changes 41.8 50.9 24.0
Exchange Rate Changes & Others (0.8) (1.6) (0.9)
Ending Cash Balance 185.3 144.3 163.4
Operating and Free Cash Flows:
Cash flows generated from operating activities were NT$45.0 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$22.8 billion in 2Q08, compared to NT$42.0 billion in 1Q08.
Please refer to the link for the index charts:
http://www.tsmc.com/uploadfile/ir/quarterly/index_charts.pdf
V. CapEx & Capacity
Capital Expenditures:
Capital expenditures for TSMC on a consolidated basis totaled US$728 million during the quarter.
In the first half of 2008, total capital expenditure reached US$1.2 billion.
V -- 1. Capital Expenditures
(In US millions) 1Q08 2Q08 YTD
TSMC 452 712 1,164
XinTec and GUC 13 5 18
TSMC Shanghai & WaferTech 18 11 29
Other TSMC Subsidiaries 1 0 1
Total TSMC 484 728 1,212
Capacity:
Total TSMC managed capacity was 2,303K 8-inch equivalent wafers in the second quarter, 6% more than 1Q08. TSMC managed capacity in 3Q08 will increase by 5% to reach 2,416K 8-inch equivalent wafers.
Total managed capacity for 2008 is expected to reach 9,377K 8-inch equivalent wafers, representing an increase of 13% from 8,290K 8-inch equivalent wafers in 2007, while capacity for 12-inch wafer fabs will increase by 27%.
V--2. Capacity
1Q08 2Q08 3Q08 4Q08 2008
Fab / (Wafer size) (A) (A) (F) (F) (F)
Fab-2 (6")(Note 1) 248 267 270 272 1,056
Fab-3 (8") 277 281 268 274 1,100
Fab-5 (8") 163 165 161 161 650
Fab-6 (8") 265 267 268 282 1,082
Fab-8 (8") 262 275 267 272 1,076
Fab-12 (12")(Note 2) 197 207 214 221 840
Fab-14 (12")(Note 2) 167 185 229 236 818
WaferTech (8") 105 105 106 106 420
TSMC (Shanghai) (8") 88 110 128 128 453
TSMC total capacity
(8 equiv. Kpcs) 2,117 2,236 2,346 2,405 9,104
SSMC (8") 63 67 69 73 272
Total managed capacity
(8 equiv. Kpcs) 2,180 2,303 2,416 2,478 9,377
Note: 1. Figures represent number of 6 wafers. Conversion to 8-
Equivalent wafers is obtained by dividing this number by 1.78
2. Figures represent number of 12 wafers. Conversion to 8-
equivalent wafers is obtained by multiplying this number by
2.25
VI. Recap of Recent Important Events & Announcements
-- TSMC Wins Corporate Governance Asia Annual Recognition Award 2008
(2008/06/26)
-- TSMC Shareholders Approve NT$3.0 Cash and 0.5% Stock Dividend
(2008/06/13)
-- TSMC Unified DFM Architecture Promises Improved Yields and
Accelerated Time-to-Market (2008/06/09)
-- New TSMC Reference Flow 9.0 Supports 40nm Process Technology
(2008/06/03)
-- TSMC Board Approves Plan to Buy Back and Cancel Shares up to US$1
billion (2008/05/13)
-- TSMC Board Approves Capital Appropriation of US$995 Million to
Expand Fab 12 and Increase Its Advanced Process Capacity (2008/05/13)
-- Intel, Samsung Electronics, TSMC Reach Agreement For 450mm Wafer
Manufacturing Transition (2008/05/06)
-- TSMC Unveils New 40/65-Nanometer SPICE Tool Qualification Program
(2008/04/22)
-- TSMC and NTHU Celebrate Opening of College of Technology Management
TSMC Building (2008/04/18)
-- TSMC Announces Power Trim Service for Advanced Chip Leakage Power
Reduction (2008/04/15)
* Please visit TSMC's Web site ( http://www.tsmc.com ) for details about these and other announcements.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars(USD)) (1)
June 30, 2008 (audited)
ASSETS USD NTD %
Current Assets
Cash and Cash Equivalents $6,106 $185,346 30.1
Investments in Marketable Financial
Instruments 1,273 38,642 6.3
Accounts Receivable -- Trade 1,379 41,858 6.8
Inventories, Net 770 23,359 3.8
Other Current Assets 348 10,558 1.7
Total Current Assets 9,876 299,763 48.7
Long-Term Investments 1,052 31,937 5.2
Property, Plant and Equipment 27,573 836,936 136.0
Less: Accumulated Depreciation (18,935) (574,738) (93.4)
Property, Plant and Equipment, Net 8,638 262,198 42.6
Other Assets 702 21,325 3.5
Total Assets $20,268 $615,223 100.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-Term Bank Loans $-- $-- --
Accounts Payable (2) 383 11,632 1.9
Payables to Contractors and
Equipment Suppliers (2) 313 9,511 1.5
Accrued Expenses and Other Current
Liabilities 3,874 117,576 19.2
Current Portion of Bonds Payable
and Long-Term Liabilities 272 8,262 1.3
Total Current Liabilities 4,842 146,981 23.9
Bonds Payable 148 4,500 0.7
Other Long-Term Liabilities 562 17,055 2.8
Total Liabilities 5,552 168,536 27.4
Shareholders' Equity Attributable to
Shareholders of the Parent
Capital Stock 8,616 261,535 42.5
Capital Surplus 1,677 50,917 8.3
Retained Earnings 5,006 151,953 24.7
Treasury Stock (489) (14,845) (2.4)
Others (208) (6,319) (1.1)
Total Equity Attributable to
Shareholders of the Parent 14,602 443,241 72.0
Minority Interests 114 3,446 0.6
Total Shareholders' Equity 14,716 446,687 72.6
Total Liabilities & Shareholders'
Equity $20,268 $615,223 100.0
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the rate of NT$30.354 as of June 30, 2008.
(2) Certain prior period balances have been reclassified to
conform to the current period presentation.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) (1)
(Continued)
March 31, 2008 June 30, 2007
(unaudited) (audited)
ASSETS NTD % NTD %
Current Assets
Cash and Cash Equivalents $144,277 24.2 $163,391 25.6
Investments in Marketable Financial
Instruments 66,034 11.1 69,685 10.9
Accounts Receivable -- Trade 37,950 6.3 37,054 5.8
Inventories, Net 21,890 3.7 24,045 3.8
Other Current Assets 11,304 1.9 10,464 1.7
Total Current Assets 281,455 47.2 304,639 47.8
Long-Term Investments 33,693 5.6 45,153 7.1
Property, Plant and Equipment 817,464 136.9 767,100 120.3
Less: Accumulated Depreciation (555,854) (93.1) (502,495) (78.8)
Property, Plant and Equipment, Net 261,610 43.8 264,605 41.5
Other Assets 20,285 3.4 23,037 3.6
Total Assets $597,043 100.0 $637,434 100.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-Term Bank Loans $-- -- $99 --
Accounts Payable (2) 10,338 1.7 11,064 1.8
Payables to Contractors and
Equipment Suppliers (2) 12,256 2.1 17,103 2.7
Accrued Expenses and Other Current
Liabilities 31,162 5.2 99,365 15.5
Current Portion of Bonds Payable
and Long-Term Liabilities 8,280 1.4 4,782 0.8
Total Current Liabilities 62,036 10.4 132,413 20.8
Bonds Payable 4,500 0.8 12,500 2.0
Other Long-Term Liabilities 17,537 2.9 18,649 2.9
Total Liabilities 84,073 14.1 163,562 25.7
Shareholders' Equity Attributable to
Shareholders of the Parent
Capital Stock 256,292 42.9 264,235 41.5
Capital Surplus 51,696 8.7 53,726 8.4
Retained Earnings 208,633 34.9 154,010 24.2
Treasury Stock (918) (0.2) (918) (0.1)
Others (6,410) (1.0) (167) (0.1)
Total Equity Attributable to
Shareholders of the Parent 509,293 85.3 470,886 73.9
Minority Interests 3,677 0.6 2,986 0.4
Total Shareholders' Equity 512,970 85.9 473,872 74.3
Total Liabilities & Shareholders'
Equity $597,043 100.0 $637,434 100.0
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the rate of NT$30.354 as of June 30, 2008.
(2) Certain prior period balances have been reclassified to
conform to the current period presentation.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) (1)
(Continued)
QoQ YoY
ASSETS Amount % Amount %
Current Assets
Cash and Cash Equivalents $41,069 28.5 $21,955 13.4
Investments in Marketable Financial
Instruments (27,392) (41.5) (31,043) (44.5)
Accounts Receivable - Trade 3,908 10.3 4,804 13.0
Inventories, Net 1,469 6.7 (686) (2.9)
Other Current Assets (746) (6.6) 94 0.9
Total Current Assets 18,308 6.5 (4,876) (1.6)
Long-Term Investments (1,756) (5.2) (13,216) (29.3)
Property, Plant and Equipment 19,472 2.4 69,836 9.1
Less: Accumulated Depreciation (18,884) 3.4 (72,243) 14.4
Property, Plant and Equipment, Net 588 0.2 (2,407) (0.9)
Other Assets 1,040 5.1 (1,712) (7.4)
Total Assets $18,180 3.0 ($22,211) (3.5)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-Term Bank Loans $-- -- ($99) (100.0)
Accounts Payable (2) 1,294 12.5 568 4.3
Payables to Contractors and Equipment
Suppliers (2) (2,745) (22.4) (7,592) (44.1)
Accrued Expenses and Other Current
Liabilities 86,414 277.3 18,211 18.3
Current Portion of Bonds Payable and
Long-Term Liabilities (18) (0.2) 3,480 72.8
Total Current Liabilities 84,945 136.9 14,568 11.0
Bonds Payable -- -- (8,000) (64.0)
Other Long-Term Liabilities (482) (2.7) (1,594) (8.5)
Total Liabilities 84,463 100.5 4,974 3.0
Shareholders' Equity Attributable to
Shareholders of the Parent
Capital Stock 5,243 2.0 (2,700) (1.0)
Capital Surplus (779) (1.5) (2,809) (5.2)
Retained Earnings (56,680) (27.2) (2,057) (1.3)
Treasury Stock (13,927) 1517.0 (13,927) 1517.0
Others 91 (1.4) (6,152) 3701.9
Total Equity Attributable to
Shareholders of the Parent (66,052) (13.0) (27,645) (5.9)
Minority Interests (231) (6.3) 460 15.4
Total Shareholders' Equity (66,283) (12.9) (27,185) (5.7)
Total Liabilities & Shareholders'
Equity $18,180 3.0 ($22,211) (3.5)
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the rate of NT$30.354 as of June 30, 2008.
(2) Certain prior period balances have been reclassified to
conform to the current period presentation.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Three Months Ended June 30, 2008, March 31, 2008, and June 30, 2007 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
Except for Per Share Amounts and Shares Outstanding)
Q2 2008 Q1 2008
USD NTD % NTD %
Net Sales $2,896 $88,137 100.0 $87,480 100.0
Cost of Sales (1,574) (47,916) (54.4) (49,241) (56.3)
Gross Profit 1,322 40,221 45.6 38,239 43.7
Operating Expenses
Research and Development
Expenses (178) (5,404) (6.1) (5,270) (6.0)
General and Administrative
Expenses (104) (3,170) (3.6) (2,662) (3.0)
Sales and Marketing Expenses (42) (1,274) (1.4) (1,184) (1.4)
Total Operating Expenses (324) (9,848) (11.1) (9,116) (10.4)
Income from Operations 998 30,373 34.5 29,123 33.3
Non-Operating Income, Net 57 1,725 1.9 1,872 2.1
Investment Gains 9 279 0.3 577 0.7
Income before Income Tax 1,064 32,377 36.7 31,572 36.1
Income Tax (Expenses) Benefits (115) (3,503) (4.0) (3,336) (3.8)
Net Income 949 28,874 32.7 28,236 32.3
Minority Interests (4) (103) (0.1) (93) (0.1)
Net Income Attributable to
Shareholders of the Parent 945 28,771 32.6 28,143 32.2
Earnings per Share -- Diluted $0.04 $1.12 -- $1.10 --
Earnings per ADR -- Diluted (2) $0.18 $5.61 -- $5.49 --
Weighted Average Outstanding
Shares -- Diluted ('M) -- 25,634 -- 25,610 --
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the weighted average rate of NT$30.437 for the second
quarter of 2008.
(2) 1 ADR equals 5 ordinary shares.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Three Months Ended June 30, 2008, March 31, 2008, and June 30, 2007 (Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
Except for Per Share Amounts and Shares Outstanding)
(Continued)
Q2 2007 QoQ YoY
NTD % Amount % Amount %
Net Sales $74,918 100.0 $657 0.8 $13,219 17.6
Cost of Sales (42,738) (57.0) 1,325 (2.7) (5,178) 12.1
Gross Profit 32,180 43.0 1,982 5.2 8,041 25.0
Operating Expenses
Research and Development
Expenses (4,301) (5.7) (134) 2.5 (1,103) 25.6
General and Administrative
Expenses (2,151) (2.9) (508) 19.1 (1,019) 47.3
Sales and Marketing
Expenses (994) (1.4) (90) 7.7 (280) 28.2
Total Operating Expenses (7,446) (10.0) (732) 8.0 (2,402) 32.3
Income from Operations 24,734 33.0 1,250 4.3 5,639 22.8
Non-Operating Income, Net 2,802 3.7 (147) (7.8) (1,077) (38.5)
Investment Gains 488 0.7 (298) (51.6) (209) (42.8)
Income before Income Tax 28,024 37.4 805 2.6 4,353 15.5
Income Tax (Expenses)
Benefits (2,394) (3.2) (167) 5.0 (1,109) 46.3
Net Income 25,630 34.2 638 2.3 3,244 12.7
Minority Interests (146) (0.2) (10) 11.7 43 (29.3)
Net Income Attributable to
Shareholders of the
Parent 25,484 34.0 628 2.2 3,287 12.9
Earnings per Share -- Diluted $0.96 -- $0.02 2.1 $0.16 16.3
Earnings per ADR -- Diluted
(2) $4.82 -- $0.12 2.1 $0.79 16.3
Weighted Average Outstanding
Shares -- Diluted ('M) 26,409 -- -- -- -- --
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the weighted average rate of NT$30.437 for the second
quarter of 2008.
(2) 1 ADR equals 5 ordinary shares.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Audited Consolidated Condensed Income Statements
For the Six Months Ended June 30, 2008 and 2007
(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
Except for Per Share Amounts and Shares Outstanding)
For the Six Months Ended
June 30 2008
USD NTD %
Net Sales $5,663 $175,617 100.0
Cost of Sales (3,133) (97,156) (55.3)
Gross Profit 2,530 78,461 44.7
Operating Expenses
Research and Development Expenses (344) (10,674) (6.1)
General and Administrative Expenses (188) (5,833) (3.3)
Sales and Marketing Expenses (80) (2,458) (1.4)
Total Operating Expenses (612) (18,965) (10.8)
Income from Operations 1,918 59,496 33.9
Non-Operating Income, Net 116 3,596 2.0
Investment Gains 28 857 0.5
Income before Income Tax 2,062 63,949 36.4
Income Tax (Expenses) Benefits (220) (6,839) (3.9)
Net Income 1,842 57,110 32.5
Minority Interest (7) (196) (0.1)
Net Income Attributable to
Shareholders of the Parent 1,835 56,914 32.4
Earnings per Share -- Diluted $0.07 $2.22 --
Earnings per ADR -- Diluted (2) $0.36 $11.08 --
Weighted Average Outstanding Shares
-- Diluted ('M) -- 25,676 --
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the weighted average rate of NTD 31.012 for the six
months ended June 30, 2008.
(2) 1 ADR equals 5 ordinary shares.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Audited Consolidated Condensed Income Statements
For the Six Months Ended June 30, 2008 and 2007
(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD) (1)
Except for Per Share Amounts and Shares Outstanding)
(Continued)
For the Six Months Ended June 30
2007 YoY
NTD % Amount %
Net Sales $139,815 100.0 $35,802 25.6
Cost of Sales (83,025) (59.4) (14,131) 17.0
Gross Profit 56,790 40.6 21,671 38.2
Operating Expenses
Research and Development Expenses (8,243) (5.9) (2,431) 29.5
General and Administrative Expenses (4,053) (2.9) (1,780) 43.9
Sales and Marketing Expenses (1,883) (1.3) (575) 30.5
Total Operating Expenses (14,179) (10.1) (4,786) 33.7
Income from Operations 42,611 30.5 16,885 39.6
Non-Operating Income, Net 4,632 3.3 (1,036) (22.4)
Investment Gains 849 0.6 8 0.9
Income before Income Tax 48,092 34.4 15,857 33.0
Income Tax (Expenses) Benefits (3,501) (2.5) (3,338) 95.3
Net Income 44,591 31.9 12,519 28.1
Minority Interest (268) (0.2) 72 (26.9)
Net Income Attributable to
Shareholders of the Parent 44,323 31.7 12,591 28.4
Earnings per Share -- Diluted $1.68 -- $0.54 32.1
Earnings per ADR -- Diluted (2) $8.39 -- $2.69 32.1
Weighted Average Outstanding Shares
-- Diluted ('M) 26,409 -- -- --
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the weighted average rate of NTD 31.012 for the six
months ended June 30, 2008.
(2) 1 ADR equals 5 ordinary shares.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the Six Months Ended June 30, 2008 and for the Three Months Ended
June 30, 2008, March 31, 2008, and June 30, 2007
(Expressed in Millions of New Taiwan Dollars (NTD) and U.S. Dollars (USD)) (1)
Six Months 2Q 1Q 2Q
2008 2008 2008 2007
(Audited) (Unaudited)(Unaudited)(Unaudited)
USD NTD NTD NTD NTD
Cash Flows from
Operating Activities:
Net Income $1,835 $56,914 $28,771 $28,143 $25,484
Net Income
Attributable to
Minority Interest 6 196 103 93 146
Depreciation &
Amortization 1,285 39,865 20,034 19,831 19,616
Deferred Income Tax 55 1,715 1,280 435 371
Equity in Earnings of
Equity Method
Investees, Net (28) (857) (280) (577) (488)
Changes in Working
Capital & Others (2) 147 4,513 (4,857) 9,370 (10,478)
Net Cash Provided by
Operating Activities 3,300 102,346 45,051 57,295 34,651
Cash Flows from
Investing Activities:
Acquisitions of:
Marketable
Financial
Instruments (920) (28,537) (14,635) (13,902) (14,234)
Investments
Accounted for
Using Equity
Method -- -- -- -- --
Property, Plant
and Equipment (1,212) (37,587) (22,274) (15,313) (25,345)
Financial Assets
Carried at Cost (10) (303) (90) (213) (218)
Proceeds from
Disposal or maturity of:
Marketable
Financial
Instruments 2,214 68,656 41,840 26,816 30,013
Investments
Accounted for
Using Equity
Method -- -- -- -- --
Property, Plant
and Equipment 1 31 30 1 10
Financial Assets
Carried at Cost 4 128 35 93 --
Others (62) (1,917) (1,310) (607) (383)
Net Cash Provided by
(Used In) Investing
Activities 15 471 3,596 (3,125) (10,157)
Cash Flows from Financing
Activities:
Decrease in Guarantee
Deposits (17) (535) (164) (371) (418)
Proceeds from Exercise
of Stock Options 6 172 91 81 175
Bonus Paid to
Directors and
Supervisors -- -- -- -- (286)
Repayment of Long-Term
Bonds Payable -- -- -- -- --
Cash Dividends Paid
for Common Stock -- -- -- -- --
Repurchase of
Treasury Stock (312) (9,669) (6,615) (3,054) --
Cash Bonus Paid to
Employees -- -- -- -- --
Others (3) (101) (159) 58 2
Net Cash Used in
Financing Activities (326) (10,133) (6,847) (3,286) (527)
Net Increase in Cash and
Cash Equivalents 2,989 92,684 41,800 50,884 23,967
Effect of Exchange Rate
Changes and Others (2) (75) (2,324) (731) (1,593) (850)
Cash and Cash Equivalents
at Beginning of Period 3,063 94,986 144,277 94,986 140,274
Cash and Cash Equivalents
at End of Period $5,977 $185,346 $185,346 $144,277 $163,391
Note: (1) Amounts in New Taiwan dollars have been translated into U.S.
dollars at the weighted average rate of NTD 31.012 for the
six months ended June 30, 2008.
(2) Certain prior period balances have been reclassified to
conform to the current period presentation.
Safe Harbor Notice:
The statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. TSMC cautions readers that forward-looking statements are subject to significant risks and uncertainties and are based on TSMC's current expectations. Actual results may differ materially from those contained in such forward-looking statements for a variety of reasons including, among others, risks associated with cyclicality and market conditions in the semiconductor industry; demand and supply for TSMC's foundry manufacturing capacity in particular and for foundry manufacturing capacity in general; intense competition; the failure of one or more significant customers to continue to place the same level of orders with us; TSMC's ability to remain a technological leader in the semiconductor industry; TSMC's ability to manage its capacity; TSMC's ability to obtain, preserve and defend its intellectual property rights; natural disasters and other unexpected events which may disrupt production; and exchange rate fluctuations. Additional information as to these and other risk factors that may cause TSMC's actual results to differ materially from TSMC's forward-looking statements may be found in TSMC's Annual Report on Form 20-F, filed with the United States Securities and Exchange Commission (the "SEC") on April 15, 2008, and such other documents as TSMC may file with, or submit to, the SEC from time to time. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
CONTACT:
Elizabeth Sun or Harrison Hsueh
Investor Relations Division
TSMC
Tel: +886-3-568-2085 or +886-3-568-2088
Email: invest@tsmc.com
Web site:
http://www.tsmc.com/
http://www.tsmc.com/uploadfile/ir/quarterly/index_charts.pdf/