08.31.2001
Seasonal comeback materializing for foundries

• Development: TSMC’s and UMC’s recent order patterns indicate a seasonal up-tick in store for 4Q01, as each benefits from demand strength in PC and consumer sectors.

• Analysis: TSMC has a better mix of PC and consumer type clientele, thus we expect a stronger revenue up-tick in 4Q01. UMC anticipates several sizable orders to firm up in September, with utilization likely to rise 3-5% from August.

• Primasia View: This will be the first time the sector has reported firm order growth in 2001. However, a seasonal pick up has been factored into market expectation, which has been running ahead of actual business conditions in the current downturn. We maintain our current ratings on both counters.