TSMC Reports Second Quarter EPS of NT$2.57

Hsinchu, Taiwan, R.O.C., July 18, 2019 -- TSMC today announced consolidated revenue of NT$241.00 billion, net income of NT$66.77 billion, and diluted earnings per share of NT$2.57 (US$0.41 per ADR unit) for the second quarter ended June 30, 2019.

Year-over-year, second quarter revenue increased 3.3% while net income and diluted EPS both decreased 7.6%. Compared to first quarter 2019, second quarter results represented a 10.2% increase in revenue and an 8.7% increase in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, second quarter revenue was $7.75 billion, which decreased 1.4% year-over-year and increased 9.2% from the previous quarter.

Gross margin for the quarter was 43.0%, operating margin was 31.7%, and net profit margin was 27.7%.

In the second quarter, shipments of 7-nanometer accounted for 21% of total wafer revenue and 10-nanometer process technology contributed 3% while 16-nanometer accounted for 23%. Advanced technologies, defined as 16-nanometer and more advanced technologies, accounted for 47% of total wafer revenue.

"In the second quarter, our business continued to be impacted by the soft overall global economic condition; customer inventory management; and high-end mobile product seasonality. But we have also passed the bottom of the cycle of our business and began to see demand increases," said Lora Ho, SVP and Chief Financial Officer of TSMC. "Driven by new product launches of premium smartphones; the acceleration of 5G deployment; and the increasing adoption of our industry-leading 7-nanometer solutions by High Performance Computing applications, we expect our third quarter business to further improve. Based on our current business outlook, management expects the overall performance for third quarter 2019 to be as follows":

• Revenue is expected to be between US$9.1 billion and US$9.2 billion;

And, based on the exchange rate assumption of 1 US dollar to 31.0 NT dollars,

• Gross profit margin is expected to be between 46% and 48%;
• Operating profit margin is expected to be between 35% and 37%

TSMC's 2019 second Quarter Consolidated results:
(Unit: NT$ million, except for EPS)

	2Q19 Amount a	2Q18 Amount	YoY Inc. (Dec.) %	1Q19 Amount	QoQ Inc. (Dec.) %
Net Sales	240,999	233,276	3.3	218,704	10.2
Gross profit	103,730	111,530	(7.0)	90,358	14.8
Income from operations	76,304	84,428	(9.6)	64,266	18.7
Income before tax	80,545	87,587	(8.0)	68,182	18.1
Net income	66,765	72,290	(7.6)	61,394	8.7
EPS (NTS)	2.57b	2.79b	(7.6)	2.37b	8.7

a: 2Q2019 figures have not bee approved by Board of Directors
b: Based on 25,930 million weighted average outstanding shares