Replies to post #8194 on Zeev's Turnips Patch-No Politics (ZEEV)

[Rayman]

From 2.5b to less than 2b, that is pretty big in my book. What the heck, my semi raids are turning green here, CYMI almost a bucker, I will play them the whole day. Finger crossed here.

[AKvetch]

TSMC Capital equipment reduction, in dollars, is shown in this article. AK
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By Mike Clendenin
Semiconductor Business News
(07/25/02 08:38 a.m. EST)

TAIPEI - Taiwan Semiconductor Manufacturing Company said profit increased 41% sequentially in the second quarter, to $279 million, as utilization hit 85% and communications customers and integrated device manufacturers buoyed demand. But it also warned that a nascent recovery in chips is starting to sputter.

The company said third quarter growth would shrink as average chip prices contract by 5% from the second quarter. Analysts believe growth will slow substantially to the high single digits. The same is expected to happen at United Microelectronics Corp., which reports earnings next week.

TSMC also cut its capital spending. Its 2002 capital expenditures is likely to be less than $2 billion, which is lower than the $2.5 billion forecasted previously. Capital spending will be reduced by about $400 million “in view of a recently updated customer demand outlook,” according to TSMC.

Last week, Singapore-based foundry Chartered Semiconductor Manufacturing said its revenues would only grow by 5% in the third quarter, much slower than its double-digit first-half growth. Chartered cited a probable slowdown in PC-related chips as those customers become more conservative about seasonal demand.

TSMC said sales rose 23% quarter on quarter, to $1.3 billion. That represented its fourth consecutive quarter of growth since hitting its bottom in the second quarter of 2001. The company reported a profit of $279 in the quarter, up 41% sequentially and 2,886.7% in the like period a year ago.

But sales are expected to shrink this month compared to last year, and company CEO Morris Chang said the semiconductor industry is likely to see single digit growth this year. Many semiconductor companies, such as Intel Corp. and Advanced Micro Devices, are forecasting lackluster sales for the current quarter and a slower than expected recovery.

A week ago, Gartner Dataquest took a more conservative view on PC growth in 2002, saying shipments would rise between 2-4%. Its previous estimate called for 5% growth.

Wafer shipments at TSMC for the second quarter of 2002 totaled 719,000 eight-inch equivalent wafers, representing a 20%increase over the first quarter of 2002, when utilization averaged 67%, the company said in a statement.

Going forward, the company projected that its overall fab utilization will fall from 85% in Q2, to 70% in Q3. In Q1, TSMC had an overall fab utilization rate of 67%.

TMSC's wafer production is expected to drop in the “single-digit percentage in Q3, with average selling prices slated to drop 5%.

[mlsoft]

"Does not say by how much or in % term from their current cap-ex spending as per briefing.com. I think we have to wait for details." -- marginnayan
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I think the problem there is not so much the size of the cut, but the fact that TSM is the only place in the chip and equipment sector where hard data was showing any kind of improvement, and now that is gone. TSM has always floated between "over-optimism" and just plain lying in its forecasts, and whichever it was this time, it is not a good sign for either the chips (demand is slowing) or the equipment companies, where the only remaining bright spot is gone.

I still think the equipments are in for another downleg in both orders and shipments, and it could last a while. There is neither the cash nor the incentive for chip companies to order new equipment at the current time.

Just my opinion, though.

mlsoft