TSMC Reports First Quarter EPS of NT$3.38

Hsinchu, Taiwan, R.O.C., April 13, 2017 - TSMC today announced consolidated revenue of NT$233.91 billion, net income of NT$87.63 billion, and diluted earnings per share of NT$3.38 (US$0.54 per ADR unit) for the first quarter ended March 31, 2017.

Year-over-year, first quarter revenue increased 14.9% while net income and diluted EPS both increased 35.3%. Compared to fourth quarter 2016, first quarter results represent a 10.8% decrease in revenue, and a 12.5% decrease in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, first quarter revenue was $7.51 billion, which decreased 9% from the previous quarter but increased 22.2% year-over-year.

Gross margin for the quarter was 51.9%, operating margin was 40.8%, and net profit margin was 37.5%.

Shipments of 16/20-nanometer accounted for 31% of total wafer revenue, and 28-nanometer process technology accounted for 25% of total wafer revenue. Advanced technologies, defined as 28-nanometer and more advanced technologies, accounted for 56% of total wafer revenue.

“Due to a stronger than expected appreciation of the NT dollar against the US dollar during the first quarter (31.16:1 actual vs. 32:1 expected), relative to our January 12th guidance for 1Q, our first quarter revenue was reduced by approximately NT$6 billion while our gross margin and operating margin was reduced by about 100 basis points,” said Lora Ho, SVP and Chief Financial Officer of TSMC. “Moving into second quarter, we forecast the demand will be weaker than the prior quarter due to supply chain inventory management during the second quarter and mobile product seasonality. Based on our current business outlook and exchange rate assumption of 1 US dollar to 30.5 NT dollars, management expects overall performance for second quarter 2017 to be as follows”:

• Revenue is expected to be between NT$213 billion and NT$216 billion;
• Gross profit margin is expected to be between 50.5% and 52.5%;
• Operating profit margin is expected to be between 39% and 41%.

TSMC's 2017 First Quarter Consolidated results:
(Unit: NT$ million, except for EPS)

	1Q17 Amount a	1Q17 Amount	YoY Inc. (Dec.) %	4Q16 Amount	QoQ Inc. (Dec.) %
Net Sales	233,914	203,495	14.9	262,227	(10.8)
Gross profit	121,490	91,338	33.0	137,109	(11.4)
Income from operations	95,352	70,467	35.3	109,907	(13.2)
Income before tax	97,822	72,256	35.4	112,047	(12.7)
Net income	87,629	64,782	35.3	100,200	(12.5)
EPS (NTS)	3.38b	3.38b	35.3	3.38b	(12.5)

^a: 1Q2017 figures have not bee approved by Board of Directors
^b: Based on 25,930 million weighted average outstanding shares