Zeev's Turnips Patch-No Politics (ZEEV)

[george8]

TSMC's utilization rate (ur) dropped from 76% to 61%, and gross margin dropped from 32% to 26% while revenue increased substantially. This implys that during last quarter, TSMC must have brought brand new fabs on line, and competitive pressure intensified. They are forecasting 60% ur for the 1st quarter of 2003, which is difficult to hold because of seasonal factor. They will have to cut capex more aggressively as time goes on in my opinion.

Very bearish indeed. Let's see how much of this is in the market already.

George