Taiwan chipmaker TSMC reports improved profit in Q2 as demand for wafers recovers

Taiwan’s TSMC reports improved profit in Q2

TAIPEI, Taiwan — Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said second quarter earnings rose significantly from the bleak first quarter as demand partially recovered from a severe slump.

Net income during the April-June period amounted to 24.4 billion New Taiwan dollars ($740 million), up from the first quarter figure of NT$1.56 billion ($47.1 million), the company said Thursday.

“After hitting bottom in the first quarter, the second quarter saw a sharp rebound in the demand for semiconductors across all applications,” said TSMC Vice President Lora Ho.

Revenues totaled NT$74.2 billion ($2.3 billion) in the second quarter, up 88 percent from the first quarter, with increasing wafer shipments for products ranging from PCs to handsets and consumer electronics, the company said.

However, revenues and profit in the second quarter were down 15 percent from a year earlier.

TSMC Chairman Morris Chang said he expected the world economic recovery to be slow, but because of the more pervasive use of chips, the semiconductor industry could recover faster.

“We expect a 5 percent increase in the semiconductor industry in 2010,” he told a news conference.

For this year, the company now predicts a 17 percent overall chip industry decline, an improvement from the bleak 30 percent decrease projected three months ago, Chang said.

TSMC has sought to cope with the world economic recession by controlling costs, improving wafer yield and keeping up technological innovation.

“Research and development spending will account for 7.8 percent of our revenues this year, quite a bit in a lean year,” he said.