Monday, January 28, 2008 1:22:49 AM
TSMC to post record Q4; UMC, Chartered Semi seen weaker
* What: TSMC, UMC and Chartered Semi Q4 results
* When: UMC (Jan 30), TSMC and Chartered (Jan 31)
* TSMC Q4 seen at record, UMC and Chartered likely weaker
By Baker Li
TAIPEI, Jan 28 (Reuters) - TSMC , the world's top contract chip maker, is set to post record quarterly profits on growing demand for PCs and consumer gadgets, though rivals UMC and Chartered Semiconductor Manufacturing Ltd will see listless results as some major clients cut orders.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) has greater economies of scale and a wider customer base than UMC and Chartered, whose fourth-quarter could be hurt by falling orders from a handful of clients, such as Texas Instruments .
The global credit crisis has raised fears that the United States may tip into recession, which could curb consumer spending and sales by all foundries in early 2008.
"Wafer shipments might decline in the first quarter," said Brent Lin, a fund manager at Taiwan's Capital Investment Trust.
"But even if the U.S. economy slows, there is a consensus that demand keeps growing in the emerging markets, so you don't have to worry too much," said Lin, who declined to disclose individual stocks in his portfolios.
TSMC is likely to see fourth-quarter earnings top its previous record set in the second quarter of 2006, but smaller rival United Microelectronics Corp has said weaker demand from the mobile phone market could hurt its business in the fourth quarter.
As the Christmas buying boom ended, TSMC's first-quarter sales could drop 6 percent from October-December, while those at UMC could fall 4 percent, according to Reuters Estimates.
Singapore-based Chartered Semi , which faces fierce competition from TSMC and UMC, may slide into the red in the first quarter.
"Our latest checks suggest the situation remains dire, with wafer starts dramatically declining into Q4, as Texas Instruments, Qualcomm and Mediatek have all cut demand meaningfully and there is still no sign of an AMD recovery," said HSBC analyst Steven Pelayo, referring to computer microprocessor maker Advanced Micro Devices .
"Our outlook for Chartered's Q1 is weaker than the (Wall) Street consensus largely due to all this negative customer exposure," said Pelayo, who expects Chartered to lose money in the current quarter.
Lingering fears over a slowing U.S. economy have triggered heavy selling among foundry shares.
TSMC's Taipei-listed shares slid to a more than two-year low and UMC shares slumped to their worst in over nine years last week, when Taiwan's main TAIEX touched its lowest level in nearly a year.
If a global recession emerges, Citigroup forecasts the world's shipment growth of personal computers and handsets could be flat this year from last year, leading to a 5 percent year-on-year decline in sales for foundries in 2008.
Citi put an "underweight" rating on Asia's foundry sector and rated both UMC and Chartered as "sell". The U.S. investment bank put TSMC at "hold".
http://asia.news.yahoo.com/080128/3/3e964.html
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* What: TSMC, UMC and Chartered Semi Q4 results
* When: UMC (Jan 30), TSMC and Chartered (Jan 31)
* TSMC Q4 seen at record, UMC and Chartered likely weaker
By Baker Li
TAIPEI, Jan 28 (Reuters) - TSMC , the world's top contract chip maker, is set to post record quarterly profits on growing demand for PCs and consumer gadgets, though rivals UMC and Chartered Semiconductor Manufacturing Ltd will see listless results as some major clients cut orders.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) has greater economies of scale and a wider customer base than UMC and Chartered, whose fourth-quarter could be hurt by falling orders from a handful of clients, such as Texas Instruments .
The global credit crisis has raised fears that the United States may tip into recession, which could curb consumer spending and sales by all foundries in early 2008.
"Wafer shipments might decline in the first quarter," said Brent Lin, a fund manager at Taiwan's Capital Investment Trust.
"But even if the U.S. economy slows, there is a consensus that demand keeps growing in the emerging markets, so you don't have to worry too much," said Lin, who declined to disclose individual stocks in his portfolios.
TSMC is likely to see fourth-quarter earnings top its previous record set in the second quarter of 2006, but smaller rival United Microelectronics Corp has said weaker demand from the mobile phone market could hurt its business in the fourth quarter.
As the Christmas buying boom ended, TSMC's first-quarter sales could drop 6 percent from October-December, while those at UMC could fall 4 percent, according to Reuters Estimates.
Singapore-based Chartered Semi , which faces fierce competition from TSMC and UMC, may slide into the red in the first quarter.
"Our latest checks suggest the situation remains dire, with wafer starts dramatically declining into Q4, as Texas Instruments, Qualcomm and Mediatek have all cut demand meaningfully and there is still no sign of an AMD recovery," said HSBC analyst Steven Pelayo, referring to computer microprocessor maker Advanced Micro Devices .
"Our outlook for Chartered's Q1 is weaker than the (Wall) Street consensus largely due to all this negative customer exposure," said Pelayo, who expects Chartered to lose money in the current quarter.
Lingering fears over a slowing U.S. economy have triggered heavy selling among foundry shares.
TSMC's Taipei-listed shares slid to a more than two-year low and UMC shares slumped to their worst in over nine years last week, when Taiwan's main TAIEX touched its lowest level in nearly a year.
If a global recession emerges, Citigroup forecasts the world's shipment growth of personal computers and handsets could be flat this year from last year, leading to a 5 percent year-on-year decline in sales for foundries in 2008.
Citi put an "underweight" rating on Asia's foundry sector and rated both UMC and Chartered as "sell". The U.S. investment bank put TSMC at "hold".
http://asia.news.yahoo.com/080128/3/3e964.html
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