09.24.2001
TSMC quintuples operating income from 2Q01

• Development: TSMC reported 3Q01 operating income of at least 4 times 2Q01 results and expects further improvement in 4Q01, exceeding our expectations.

• Analysis: As per the new guidance, TSMC’s 3Q01 operating profit would reach between NT$1.4 - 1.5bn, leading to marginal pretax income after deducting investment losses from subsidiaries. Noting little upside on 3Q01 revenue, TSMC’s cost cutting measures have been successful during the quarter. Although only slightly ahead of our previous expectations, the result is encouraging at a time when the market expects further downgrades on current estimates for all semiconductor companies after the US attack.

• Primasia View: We remain cautious on the business outlook for 4Q01 and 1H02, which may trigger further downgrades of our current estimates.