TSMC Reports Third Quarter EPS of NT$2.91

Hsinchu, Taiwan, R.O.C., October 15, 2015 - TSMC today announced consolidated revenue of NT$212.51 billion, net income of NT$75.33 billion, and diluted earnings per share of NT$2.91 (US$0.46 per ADR unit) for the third quarter ended September 30, 2015.

Year-over-year, third quarter revenue increased 1.7% while net income and diluted EPS both decreased 1.3%. Compared to second quarter 2015, third quarter results represent a 3.4% increase in revenue, and a 5.1% decrease in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, third quarter revenue was $6.67 billion, which was essentially flat with the previous quarter but decreased 4.3% year-over-year.

Gross margin for the quarter was 48.2%, operating margin was 36.9%, and net profit margin was 35.4%. Due to the termination of TSMC Solar operation in third quarter, TSMC incurred a loss of NT$2.8 billion, which negatively impacted operating profit margin by about 1.3 percentage points and EPS by about NT$0.08.

Shipments of 16/20-nanometer accounted for 21% of wafer revenues, and 28-nanometer process technology accounted for 27% of total wafer revenues. Advanced technologies, defined as 28-nanometer and more advanced technologies, accounted for 48% of total wafer revenues.

“Due to a more favorable exchange rate between the NT dollar and the US dollar, TSMC’s third quarter revenue exceeded the high end of the guidance given in July,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “The ramp of our 16-nanometer technologies, which started in third quarter, accelerates in fourth quarter and is expected to contribute to fourth quarter revenue more significantly. Based on our current business outlook and exchange rate assumption of 1 US dollar to 32.71 NT dollars, management expects overall performance for fourth quarter 2015 to be as follows”:

• Revenue is expected to be between NT$201 billion and NT$204 billion;
• Gross profit margin is expected to be between 47.5% and 49.5%;
• Operating profit margin is expected to be between 36.5% and 38.5%.

The management also states 2015 capital budget to be about US$8 billion.

TSMC's 2015 Third Quarter Consolidated results:
(Unit: NT$ million, except for EPS)

	3Q15 Amount a	3Q14 Amount	YoY Inc. (Dec.) %	2Q15 Amount	QoQ Inc. (Dec.) %
Net Sales	212,505	209,049	1.7	205,440	3.4
Gross profit	102,336	105,575	(3.1)	99,705	2.6
Income from operations	78,389	84,427	(7.2)	77,069	1.7
Income before tax	83,394	85,376	(2.3)	98,132	(15.0)
Net income	75,330	76,331	(1.3)	79,417	(5.1)
EPS (NTS)	2.91a	2.94b	(1.3)	3.06b	(5.1)

a: 3Q2015 figures have not bee approved by Board of Directors
b: Based on 25,930 million weighted average outstanding shares