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Taiwan chip giant soars
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January 27, 2000: 7:29 a.m. ET
Taiwan Semiconductor 4Q net more than triples; capacity still tight
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LONDON (CNNfn) - Taiwan Semiconductor Manufacturing (TSMC), the world's largest maker of made-to-order microchips, posted a three-fold surge in fourth-quarter earnings Thursday and predicted sales growth of 20 percent this year.
Net profit in the quarter climbed to T$8.31 billion ($270 million) from T$2.52 billion a year earlier.
The result lifted full-year 1999 earnings by 60 percent to T$24.56 billion, in line with the consensus forecast of analysts polled by Reuters.
TSMC, which has stock listings in Taipei and New York, has cashed in leading chip makers' increasing tendency to outsource the production of their chips, which boosted the company's sales 46 percent to T$73.13 billion. The Taiwanese company does not design its own semiconductors.
Chairman Morris Chang shrugged off the impact of the earthquake that hit Taiwan last September and led to chip production all but halting across the country in the third quarter of 1999.
He said he expects outsourcing to continue to gather pace. "In the foreseeable future, the foundry business will grow even faster than the semiconductor industry," he said.
TSMC said capacity shortfalls last year crimped the pace of sales growth. Chang said this was likely to be repeated in 2000, despite a 79 percent rise in capacity following two acquisitions.
The company agreed this month to acquire Taiwanese Worldwide Semiconductor in a stock swap valued at up to $8 billion. It also bought out its chip-making joint venture with Acer Inc. TSMC said the two purchases would make no more than a 5 percent difference to earnings this year.
Taiwan Semiconductor shares closed up T$2 at T$208 before the earnings announcement. 
-- from staff and wire reports
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