03.09.2001
February revenue declines in line with expectation

• TSMC (2330 'Tai Ji Dian') clocked up February revenue of NT$11.6b, down 28% on the short working month of January. The July 2000 merger aside, the company has seen minimal organic growth YoY. UMC (2303 'Lian Dian') posted NT$7.5b revenue last month, a fall of 21% MoM and a rise of 9% YoY on the shorter working month of February 2000.

• These results are in line with market expectation as the foundry business looks set for QoQ revenue decline from 4Q00.

• We predict 2Q01 will move at a pedestrian pace in the foundry subsector, with utilization at 60%. The current share price lows have already factored in negative developments down the road, and are awaiting for a turnaround in fundamentals in 2H01. We reiterate our position that recovery will come in 2H01, and recommend a LONG TERM BUY on both TSMC and UMC.

LindaLiu@Primasia.com +886-[0]2-2547-8867