TSMC Reports Fourth Quarter EPS of NT$0.48

Hsin-Chu, Taiwan, R.O.C., January 22, 2009 -- TSMC today announced consolidated revenue of NT$64.56 billion, net income of NT$12.45 billion, and diluted earnings per share of NT$0.48 (US$0.07 per ADS unit) for the fourth quarter ended December 31, 2008. Year-over-year, fourth quarter revenue decreased 31.2% while net income and diluted EPS decreased 63.9% and 62.3%, respectively. Compared to third quarter of 2008, fourth quarter results represent a 30.6% decrease in revenue, a decrease of 59.3% in net income, and a decrease of 59% in diluted EPS. All figures were prepared in accordance with R.O.C. GAAP on a consolidated basis.

Triggered by a deepening economic recession worldwide and customers’ inventory adjustment, fourth quarter saw a sharp decline in the demand for semiconductors across all applications. Gross margin for the quarter was 31.3%, operating margin was 18.6%, and net margin was 19.3%. Advanced process technologies (0.13-micron and below) accounted for 65% of wafer revenues with 90-nanometer process technology accounting for 21% and 65-nanometer reaching 27% of total wafer sales.

“The global economic recession continues to worsen. Fourth quarter end-market sell-through was much below the already conservative expectations, and consumer demand remains very weak. This has led to a rising DOI for our customers, who continue to pare their inventories aggressively, resulting in a further significant cut back of wafer demand,” said Lora Ho, VP and Chief Financial Officer of TSMC. “Based on our current business outlook, management expects overall performance for first quarter 2009 to be as follows”:

Revenue is expected to be between NT$32 billion and NT$35 billion;
Gross profit margin is expected to be between 1% and 5%;
Operating profit margin is expected to be between -19% and -15%.

TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry's largest portfolio of process-proven libraries, IP, design tools and reference flows. The Company's total managed capacity in 2008 is to exceed nine million (8-inch equivalent) wafers, including capacity from two advanced 12-inch Gigafabs, four eight-inch fabs, one six-inch fab, as well as TSMCs wholly owned subsidiaries, WaferTech and TSMC (Shanghai), and its joint venture fab, SSMC. TSMC is the first foundry to provide 40nm production capabilities. Its corporate headquarters are in Hsinchu, Taiwan. For more information about TSMC please see http://www.tsmc.com.