TSMC Reports Second Quarter EPS of NT$2.30

Hsinchu, Taiwan, R.O.C., July 16, 2014 -- TSMC today announced consolidated revenue of NT$183.02 billion, net income of NT$59.7 billion, and diluted earnings per share of NT$2.3 (US$0.38 per ADR unit) for the second quarter ended June 30, 2014.

Year-over-year, second quarter revenue increased 17.4% while net income and diluted EPS both increased 15.2%, mainly reflecting the increase in tax rate. Compared to first quarter 2014, second quarter results represent a 23.5% increase in revenue, and a 24.7% increase in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, second quarter revenue increased 24% from the previous quarter and increased 16.3% year-over-year.

Gross margin for the quarter was 49.8%, operating margin was 38.6%, and net profit margin was 32.6%.

Shipments of 28-nanometer process technology accounted for 37% of total wafer revenues. 40/45-nanometer accounted for 19% of total wafer revenues. Advanced technologies, defined as 40/45-nanometers and more advanced technologies, accounted for 56% of total wafer revenues.

“In the second quarter, we saw strength of demand for our wafers across all segments, while our 28-nanometer technology business grew more than 30% from the previous quarter to account for 37 percent of our total wafer sales” said Lora Ho, SVP and Chief Financial Officer of TSMC. “While we expect the strong demand for our wafers to continue, the new technology node, our 20-nanometer System-on-Chip, has begun volume shipments and is expected to account for about 10 percent of our wafer revenue in the third quarter. Based on our current business outlook and exchange rate assumption of 1 US dollar to 29.81 NT dollars, management expects overall performance for third quarter 2014 to be as follows”:

• Revenue is expected to be between NT$206 billion and NT$209 billion;

• Gross profit margin is expected to be between 48.5% and 50.5%;

• Operating profit margin is expected to be between 38.5% and 40.5%.