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TSMC has finally budgeted capital spending for 2009 as a bottom would seem to have drawn under declining sales and lowered capacity utilization rates in the first quarter of 2009. Capital spending is expected to be in the range of US$1.5 billion, the company said, down from US$1.9 billion in 2009. Capital expenditures for 1Q09 totalled US$166 million.

Year-over-year, first quarter revenue decreased 54.8% (NT$39.5 billion) and a 38.8% decrease in revenue compared to the fourth quarter of 2008. Gross margin for the quarter was 18.9%, operating margin was 3.1%, and net margin was 3.9%.

"Although global economic conditions continue to decline, a few signs of economic stabilization began to emerge,” commented Lora Ho, VP and Chief Financial Officer of TSMC. “Consumption of electronics in the last two quarters exceeded production and surpassed semiconductor companies' low expectations. Meanwhile, companies began to launch new products, while China started implementing various stimulus programs. The dynamic has resulted in a substantial increase in order levels. After sharp declines in two consecutive quarters, TSMC is seeing a strong rebound in its second quarter business and believes overall business in the second half of 2009 will be considerably better than that of the first half.”

The foundry expects second quarter financials to improve considerably, guiding revenue between NT$71 billion and NT$74 billion and gross profit margin between 43.5% and 45.5%.  Operating profit margin is expected to be between 30.5% and 32.5%.

From a technology revenue perspective, TSMC recorded its first significant quarter of revenue from the 45/40nm node of 1% of total wafer sales. Neither UMC nor SMIC are expecting to generate revenue in percentage of sales terms at these nodes in 2009.
Only Chartered Semiconductor has been the other major foundry to report 45nm technology revenue in 2009.

TSMC said that revenue from 65nm and 90nm were 23% and 25% of total wafer sales, respectively. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 65% of total wafer sales.

Total managed capacity was 2,495K 200mm equivalent wafers in the first quarter, which increased by 0.7% from 2,478K in 4Q08.

Total managed capacity in 2009 is expected to reach 9,954K 200mm equivalent wafers, representing an increase of 6% from 9,377K 200mm equivalent wafers in 2008. 300mm fab capacity is expected to increase by 11% in 2009, reaching 41.5% of the total by the end of the year.

300mm fab capacity increases are focused on Fab 12 in 2009, rather than Fab 14. Quarterly wafer starts are expected to reach 254K at Fab 12 by the end of 4Q09, up from 218K in 1Q09. Fab 14 capacity remains static at 227K by 4Q09, compared to 228K in 1Q09.