10.09.2001
September sees improved results

• TSMC and UMC reported Sept. revenue of NT$9.3bn and NT$4.2bn, up 3% and 7% MoM, respectively. Updated forecasts for both firms point to a seasonal uptick during 4Q01, reflecting estimated QoQ revenue increases of about 8% (TSMC) and 11% (UMC). Both firms suggested that the increases are attributable to seasonal strength in the Consumer and Computer sectors and recovery of orders by several Communications customers. Meanwhile, both admit that under current circumstances, delivery lead times are as short as 1 month, a visible duration for both firms. We remain concerned about the prolonged recovery of the sector. However, due to share price drops since Sept. (28% for TSMC and 36% for UMC) P/B multiples have hit historical lows. We recommend a Range Trading opportunity on these counters.