6-K 1 h02585e6vk.htm FORM 6-K FORM 6-K
 
 
1934 Act Registration No. 1-14700
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2008
Taiwan Semiconductor Manufacturing
Company Ltd.
(Translation of Registrant’s Name Into English)
No. 8, Li-Hsin Rd. 6,
Science-Based Industrial Park,
Hsin-Chu, Taiwan
(Address of Principal Executive Offices)
     (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
     Form 20-F þ                    Form 40-F o
     (Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
     Yes o                               No þ
(If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82: ________.)
 
 

 

     
FOR IMMEDIATE RELEASE
(TSMC LOGO) 		  3Q08 Quarterly Management Report
October 30, 2008
CONTACT
Elizabeth Sun / Harrison Hsueh
Investor Relations Division
TSMC
invest@tsmc.com
886-3-568-2085/ 2088
Topics in This Report
•   Revenue Analysis
•   Profit & Expense Analysis
•   Financial Condition Review
•   Cash Flow
•   CapEx & Capacity
•   Recap of Recent Important Events & Announcements
Operating Results Review:
Summary:
                                         
(Amounts are on consolidated basis and are in
NT billions except otherwise noted)		   3Q08   2Q08   3Q07   QoQ   YoY
EPS (NT$per common share)
     1.18       1.10       1.13       7.5 %     4.9 %
(US$per ADR unit)
     0.19       0.18       0.17                  
 
                                        
Consolidated Net Sales
     92.98       88.14       88.96       5.5 %     4.5 %
Gross Profit
     43.09       40.22       40.72       7.1 %     5.8 %
Gross Margin
     46.3 %     45.6 %     45.8 %                
 
                                        
Operating Expense
     (10.18 )     (9.85 )     (8.37 )     3.3 %     21.6 %
Operating Income
     32.92       30.37       32.35       8.4 %     1.7 %
Operating Margin
     35.4 %     34.5 %     36.4 %                
Non-Operating Items
     1.51       2.00       1.87       (24.5 %)     (18.9 %)
 
                                        
Net Income
     30.57       28.77       30.37       6.3 %     0.7 %
Net Profit Margin
     32.9 %     32.6 %     34.1 %                
 
                                        
Wafer Shipment (kpcs 8 inch-equiv.)
     2,411       2,329       2,226       3.5 %     8.3 %
 
Note: Total outstanding shares were 25,625mn units on 9/30/08
Remarks:
The diluted earnings per share in 3Q08 were NT$1.18, representing an increase of 4.9% over the same period last year and an increase of 7.5% from the previous quarter. The consolidated operating results of 3Q08 are summarized below:
Net sales in the third quarter were NT$93.0 billion, up 4.5% from NT$89.0 billion in 3Q07 and up 5.5% from NT$88.1 billion in 2Q08.
Gross profit for the quarter was NT$43.1 billion with gross margin of 46.3%, 0.7 percentage point higher than the 45.6% gross margin in 2Q08, mainly due to a favorable change of the exchange rate.
Operating expenses, including expenses accrued for employee profit sharing, were NT$10.2 billion or 10.9% of net sales. The combined result from non-operating income and long-term investments was a gain of NT$1.5 billion.
Consolidated net income attributable to shareholders of the parent company, including an accrual of employee profit sharing, was NT$30.6 billion, slightly up 0.7% from a year ago level and up 6.3% from the previous quarter. Net profit margin was 32.9% for 3Q08.

 

TSMC
October 30, 2008 		 
Page 2
I. Revenue Analysis
     I. Wafer Sales Analysis
                         
By Application   3Q08   2Q08   3Q07
Computer
     33 %     31 %     32 %
Communication
     41 %     41 %     42 %
Consumer
     20 %     21 %     17 %
Industrial/Others
     6 %     7 %     9 %
                         
By Technology   3Q08   2Q08   3Q07
65nm and below
     25 %     18 %     7 %
90nm
     26 %     28 %     27 %
0.11/0.13um
     15 %     17 %     22 %
0.15/0.18um
     22 %     23 %     28 %
0.25/0.35um
     9 %     10 %     11 %
0.50um+
     3 %     4 %     5 %
                         
By Customer Type   3Q08   2Q08   3Q07
Fabless/System
     70 %     71 %     66 %
IDM
     30 %     29 %     34 %
                         
By Geography   3Q08   2Q08   3Q07
North America
     74 %     73 %     74 %
Asia Pacific
     13 %     13 %     13 %
Europe
     10 %     11 %     10 %
Japan
     3 %     3 %     3 %
Revenue Analysis:
In-line with our guidance, the third quarter 2008 revenue reached NT$93.0 billion. 3Q08 business saw a continued improvement and revenue benefited from a 2.4% depreciation in the NT dollar against the US dollar. Demand grew across the board during the quarter. On a quarter-over-quarter basis, revenues from computer, communication, and consumer applications increased 9%, 7% and 1%, respectively.
As a result of continued strong ramp for our 65nm technology, revenue from 65nm reached 25% of total wafer sales during the quarter, up from 18% in the previous quarter. Meanwhile, revenue from 90nm declined slightly to 26% of total wafer sales. Overall, revenues from advanced technologies (0.13-micron and below) accounted for 66% of total wafer sales, up from 63% in 2Q08.
Revenues from IDM customers accounted for 30% of total wafer sales in 3Q08, slightly up from 2Q08.
From a geographic perspective, revenues from customers based in North America accounted for 74% of total wafer sales. Meanwhile, sales from customers in Asia Pacific, Europe and Japan accounted for 13%, 10% and 3% of wafer sales, respectively.
II. Profit & Expense Analysis
     II — 1. Gross Profit Analysis
                         
(In NT billions)   3Q08   2Q08   3Q07
COGS
     49.89       47.92       48.23  
Depreciation
     19.06       18.23       18.20  
Other MFG Cost
     30.83       29.69       30.03  
 
                        
Gross Profit
     43.09       40.22       40.72  
 
                        
Gross Margin
     46.3 %     45.6 %     45.8 %
Gross Profit Analysis:
Gross margin in 3Q08 was 46.3%, up 0.7 percentage point from the previous quarter, mainly reflecting a favorable change of the exchange rate.

 

 

TSMC
October 30, 2008 		 
Page 3
     II — 2. Operating Expenses
                         
(In NT billions)   3Q08   2Q08   3Q07
Total Operating Exp.
     10.18       9.85       8.37  
SG&A
     4.20       4.45       3.68  
Research & Development
     5.98       5.40       4.69  
Total Operating Exp. as a % of Sales
     10.9 %     11.1 %     9.4 %
Operating Expenses:
Total operating expenses for 3Q08 increased by 3.3% sequentially to reach NT$10.2 billion, or 10.9% of net sales, compared with 11.1% of net sales in the previous quarter.
Research and development expenditures increased by NT$577 million quarter-over-quarter, mainly due to 32nm technology development and 45nm technology transfer.
SG&A expenses decreased by NT$248 million from the previous quarter, primarily due to less spending in this quarter for the ramp-up of Fab 14 Phase 3 and for the promotion of world-wide technology marketing activities.
     II — 3. Non-Operating Items
                         
(In NT billions)   3Q08   2Q08   3Q07
Non-Operating Inc./(Exp.)
     1.33       1.72       1.09  
Net Interest Income/(Exp.)
     1.15       1.24       1.10  
Other Non-Operating
     0.18       0.48       (0.01 )
 
                        
L-T Investments
     0.18       0.28       0.78  
SSMC
     0.15       0.30       0.41  
Others
     0.03       (0.02 )     0.37  
 
                        
Total Non-Operating Items
     1.51       2.00       1.87  
Non-Operating Items:
Combined result from non-operating income and long-term investments income was a gain of NT$1.5 billion for the third quarter 2008.
Non-operating income was NT$1.3 billion, down from NT$1.7 billion in 2Q08, primarily due to an increase of valuation losses on financial instruments, less gains from disposal of financial assets, and recognition of losses from idle tools, but partially offset by less impairment losses of financial assets.
Net investment income decreased by NT$94 million in the quarter to NT$185 million.
     II — 4. PSE Impact
                         
    3Q08   2Q08   3Q07
Gross Margin w/ PSE
     46.3 %     45.6 %     41.3 %
Gross Margin w/o PSE
     48.9 %     48.2 %     45.8 %
PSE Impact
     -2.6 %     -2.6 %     -4.5 %
 
                        
Operating Margin w/ PSE
     35.4 %     34.5 %     27.7 %
Operating Margin w/o PSE
     40.3 %     39.4 %     36.4 %
PSE Impact
     -4.9 %     -4.9 %     -8.7 %
 
*   PSE: Profit Sharing Expenses
 
**   2007 PSE impact is estimated using the 6/12/2008 closing share price adjusted for dividends
The Impact of Employee Profit Sharing:
Total impact from employee profit sharing expensing (PSE) on gross margin in 3Q08 was 2.6 percentage points, flat comparing to the previous quarter.
Similarly, total PSE impact on operating margin was 4.9 percentage points in 3Q08.

 

 

TSMC
October 30, 2008 		 
Page 4
III. Financial Condition Review
     III — 1. Liquidity Analysis
(Selected Balance Sheet Items)
                         
(In NT billions)   3Q08   2Q08   3Q07
Cash & Marketable Securities
     158.17       223.99       176.39  
Accounts Receivable — Trade
     45.33       41.86       42.36  
Inventory
     21.82       23.36       24.53  
Total Current Assets
     232.35       299.76       250.06  
Accounts Payable
     17.75       21.14       24.24  
Current Portion of Bonds Payable
     8.00       8.00       4.50  
Dividends Payable
     0.00       77.04       0.00  
Accrued Bonus to Employees, Directors and Supervisors
     13.46       12.96       0.00  
Accrued Liabilities and Others
     22.92       27.84       22.15  
Total Current Liabilities
     62.13       146.98       50.89  
Current Ratio (x)
     3.7       2.0       4.9  
Net Working Capital
     170.22       152.78       199.17  
Liquidity Analysis:
At the end of 3Q08, total current assets decreased by NT$ 67.4 billion to NT$232.3 billion, mainly due to the decrease of NT$65.8 billion in cash and marketable securities as we paid cash dividend of NT$76.8 billion in this quarter.
Total current liabilities decreased by NT$84.8 billion in this quarter, primarily due to the payment of cash dividends accrued in the previous quarter.
Net working capital was NT$170.2 billion and current ratio increased to 3.7 at the end of this quarter.
     III — 2. Receivable/Inventory Days
                         
(In Number of Days)   3Q08   2Q08   3Q07
Days of Receivable
     43       42       42  
Days of Inventory
     45       47       48  
Receivable and Inventory Days:
Sequentially, days of receivable increased by one day to 43 days in 3Q08 while days of inventory decreased by two days to 45 days.
     III — 3. Debt Service
                         
(In NT billions)   3Q08   2Q08   3Q07
Cash & Marketable Securities
     158.17       223.99       176.39  
Interest-Bearing Debt
     23.41       22.90       26.66  
Net Cash Reserves
     134.76       201.09       149.73  
Debt Service:
Net cash reserves — defined as the excess of cash and short-term marketable securities over interest-bearing debt — decreased by NT$66.3 billion to NT$134.8 billion at the end of 3Q08, primarily due to the payment of cash dividends.

 

TSMC
October 30, 2008 		 
Page 5
IV. Cash Flow
     IV — 1. Cash Flow Analysis
                         
(In NT billions)   3Q08   2Q08   3Q07
Net Income
     30.57       28.77       30.37  
Depreciation & Amortization
     20.69       20.03       19.86  
Other Operating Sources/(Uses)
     4.64       (3.75 )     0.98  
Total Operating Sources/(Uses)
     55.90       45.05       51.21  
 
                        
 
                        
Capital Expenditure
     (10.38 )     (22.27 )     (24.92 )
Marketable Financial Instruments
     (18.07 )     27.20       (2.76 )
Other Investing Sources/(Uses)
     1.93       (1.33 )     (6.78 )
Net Investing Sources/(Uses)
     (26.52 )     3.60       (34.46 )
 
                        
 
                        
Cash Dividends
     (76.78 )     0.00       (77.39 )
 
                        
Employee Profit Sharing
     (3.94 )     0.00       (4.57 )
 
                        
Purchase of Treasury Stock
     (23.81 )     (6.62 )     0.00  
Other Financing Sources/(Uses)
     (0.43 )     (0.23 )     (0.02 )
Net Financing Sources/(Uses)
     (104.96 )     (6.85 )     (81.98 )
 
                        
 
                        
Net Cash Position Changes
     (75.58 )     41.80       (65.23 )
 
                        
Exchange Rate Changes & Others
     2.68       (0.73 )     0.17  
 
                        
Ending Cash Balance
     112.45       185.35       98.33  
Summary of Cash Flow:
Cash generated from operating activities totaled NT$55.9 billion during the quarter, up from NT$45.1 billion in 2Q08.
Net cash used in investing activities was NT$26.5 billion in 3Q08, reflecting the capital expenditure of NT$10.4 billion and a net increase of NT$18.1 billion in marketable financial instruments.
Net cash used in financing activities was NT$105.0 billion during the quarter, as we paid NT$80.7 billion for cash dividends and employee profit sharing as well as NT$23.8 billion in share buyback.
As a result, TSMC ended the quarter with a cash balance of NT$112.4 billion.
(CHART)
Operating and Free Cash Flows:
Cash flows generated from operating activities were NT$55.9 billion during the quarter. Free cash flow, defined as the excess of operating cash flows over capital expenditures, totaled NT$45.5 billion in 3Q08, compared to NT$22.8 billion in 2Q08.

 

 

TSMC
October 30, 2008 		 
Page 6
V. CapEx & Capacity
     V — 1. Capital Expenditures
                                 
(In US millions)   1Q08   2Q08   3Q08   YTD
TSMC
     452       712       317       1,481  
XinTec and GUC
     13       5       3       21  
TSMC Shanghai & WaferTech
     18       11       11       40  
Other TSMC Subsidiaries
     1       0       1       2  
 
                                
Total TSMC
     484       728       332       1,544  
Capital Expenditures:
Capital expenditures for TSMC on a consolidated basis totaled US$332 million during the quarter.
First quarter through third quarter 2008, total capital expenditure reached US$1.5 billion.
     V—2. Capacity
                                         
    1Q08   2Q08   3Q08   4Q08   2008
Fab / (Wafer size)   (A)   (A)   (A)   (F)   (F)
Fab-2 (6")1
     248       267       270       272       1,056  
Fab-3 (8")
     277       281       268       274       1,100  
Fab-5 (8")
     163       165       161       161       650  
Fab-6 (8")
     265       267       268       282       1,082  
Fab-8 (8")
     262       275       267       272       1,076  
Fab-12 (12")2
     197       207       214       221       840  
Fab-14 (12")2
     167       185       229       236       818  
WaferTech (8")
     105       105       106       106       420  
TSMC (Shanghai) (8")
     88       110       128       128       453  
TSMC total capacity (8" equiv. Kpcs)
     2,117       2,236       2,346       2,405       9,104  
SSMC (8")
     63       67       69       73       272  
Total managed capacity (8” equiv. Kpcs)
     2,180       2,303       2,416       2,478       9,377  
 
Note:  1.  Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is obtained by dividing this number by 1.78
 
  2. Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is obtained by multiplying this number by 2.25
Capacity:
Total TSMC managed capacity was 2,416K 8-inch equivalent wafers in the third quarter, 5% more than 2Q08. TSMC managed capacity in 4Q08 will increase by 3% to reach 2,478K 8-inch equivalent wafers.
Total managed capacity for 2008 is expected to reach 9,377K 8-inch equivalent wafers, representing an increase of 13% from 8,290K 8-inch equivalent wafers in 2007, while capacity for 12-inch wafer fabs will increase by 27%.

 

 

TSMC
October 30, 2008 		 
Page 7
VI. Recap of Recent Important Events & Announcements
l    TSMC Wins Asia’s Best Companies Poll 2008 Held by FinanceAsia to Be Taiwan’s Best Managed Companies, Best Corporate Governance, Best Investor Relations, And Most Committed to a Strong Dividend Policy (2008/09/30)
 
l    TSMC’s 28nm Will Be a Full Node Process to Provide First Comprehensive Manufacturing Platform Featuring Both High-K Metal Gate And Silicon Oxynitride (2008/09/29)
 
l    TSMC Was Selected As DJSI Member For Eighth Straight Year and Joins Carbon Disclosure Leadership Index For First Time (2008/09/26)
 
l    Philips Completes Exit of TSMC Shareholding (2008/08/14)
 
l    TSMC Board Approves Plan to Buy Back Shares Up to NT$16.5 Billion (Approximately US$542 Million), or No More Than 283 Million Shares, of The Company’s Common Shares from The Open Market (2008/08/12)
 
l    TSMC Fab 14, Phase 3 Wins LEED Green Building Certification With “Gold Class” Score (2008/08/07)
 
l    TSMC Announces Material Information About Clarification of TSMC’s Business Outlook for The Second And Third Quarters 2008 (2008/07/03)
 
l    TSMC Announces Common Share Ex-dividend Date at July 16th, 2008 (2008/07/01)
 
*   Please visit TSMC’s Web site (http://www.tsmc.com) for details about these and other announcements.

 

 

     
(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) (1)
                                                                                         
    September 30, 2008 (unaudited)     June 30, 2008 (audited)     September 30, 2007 (unaudited)     QoQ     YoY  
    USD     NTD     %     NTD     %     NTD     %     Amount     %     Amount     %  
ASSETS
                                                                                        
Current Assets
                                                                                        
Cash and Cash Equivalents
   $ 3,500     $ 112,446       20.4     $ 185,346       30.1     $ 98,328       16.8     ($ 72,900 )     (39.3 )   $ 14,118       14.4  
Investments in Marketable Financial Instruments
     1,423       45,724       8.3       38,642       6.3       78,064       13.3       7,082       18.3       (32,340 )     (41.4 )
Accounts Receivable — Trade
     1,411       45,333       8.2       41,858       6.8       42,357       7.2       3,475       8.3       2,976       7.0  
Inventories, Net
     679       21,817       4.0       23,359       3.8       24,532       4.2       (1,542 )     (6.6 )     (2,715 )     (11.1 )
Other Current Assets
     219       7,029       1.3       10,558       1.7       6,775       1.2       (3,529 )     (33.4 )     254       3.8  
 
                                                                  
Total Current Assets
     7,232       232,349       42.2       299,763       48.7       250,056       42.7       (67,414 )     (22.5 )     (17,707 )     (7.1 )
 
                                                                  
 
                                                                                        
Long-Term Investments
     1,303       41,874       7.6       31,937       5.2       45,991       7.8       9,937       31.1       (4,117 )     (9.0 )
 
                                                                                        
Property, Plant and Equipment
     26,449       849,818       154.5       836,936       136.0       786,850       134.2       12,882       1.5       62,968       8.0  
Less: Accumulated Depreciation
     (18,597 )     (597,523 )     (108.6 )     (574,738 )     (93.4 )     (521,614 )     (89.0 )     (22,785 )     4.0       (75,909 )     14.6  
 
                                                                  
Property, Plant and Equipment, Net
     7,852       252,295       45.9       262,198       42.6       265,236       45.2       (9,903 )     (3.8 )     (12,941 )     (4.9 )
 
                                                                  
 
                                                                                        
Other Assets
     731       23,481       4.3       21,325       3.5       25,124       4.3       2,156       10.1       (1,643 )     (6.5 )
 
                                                                  
Total Assets
   $ 17,118     $ 549,999       100.0     $ 615,223       100.0     $ 586,407       100.0     ($  65,224 )     (10.6 )   ($  36,408 )     (6.2 )
 
                                                                  
 
                                                                                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                                        
Current Liabilities
                                                                                        
Short-Term Bank Loans
   $ —     $ —       —     $ —       —     $ 98       —     $ —       —     ($ 98 )     (100.0 )
Accounts Payable
     301       9,671       1.8       11,632       1.9       12,492       2.1       (1,961 )     (16.9 )     (2,821 )     (22.6 )
Payables to Contractors and Equipment Suppliers
     252       8,082       1.4       9,511       1.5       11,745       2.0       (1,429 )     (15.0 )     (3,663 )     (31.2 )
Accrued Expenses and Other Current Liabilities
     1,124       36,124       6.6       117,576       19.2       21,776       3.8       (81,452 )     (69.3 )     14,348       65.9  
Current Portion of Bonds Payable and Long-Term Liabilities
     257       8,258       1.5       8,262       1.3       4,782       0.8       (4 )     (0.0 )     3,476       72.7  
 
                                                                  
Total Current Liabilities
     1,934       62,135       11.3       146,981       23.9       50,893       8.7       (84,846 )     (57.7 )     11,242       22.1  
 
                                                                  
Bonds Payable
     140       4,500       0.8       4,500       0.7       12,500       2.1       —       —       (8,000 )     (64.0 )
Other Long-Term Liabilities
     546       17,541       3.2       17,055       2.8       18,395       3.1       486       2.9       (854 )     (4.6 )
 
                                                                  
Total Liabilities
     2,620       84,176       15.3       168,536       27.4       81,788       13.9       (84,360 )     (50.1 )     2,388       2.9  
 
                                                                  
 
                                                                                        
Shareholders’ Equity Attributable to Shareholders of the Parent
                                                                                        
Capital Stock
     8,062       259,042       47.1       261,535       42.5       264,262       45.1       (2,493 )     (1.0 )     (5,220 )     (2.0 )
Capital Surplus
     1,571       50,463       9.2       50,917       8.3       53,713       9.2       (454 )     (0.9 )     (3,250 )     (6.1 )
Retained Earnings
     5,315       170,779       31.0       151,953       24.7       184,380       31.4       18,826       12.4       (13,601 )     (7.4 )
Treasury Stock
     (514 )     (16,500 )     (3.0 )     (14,845 )     (2.4 )     (918 )     (0.2 )     (1,655 )     11.1       (15,582 )     1697.2  
Others
     (53 )     (1,708 )     (0.3 )     (6,319 )     (1.1 )     (162 )     —       4,611       (73.0 )     (1,546 )     954.2  
 
                                                                  
Total Equity Attributable to Shareholders of the Parent
     14,381       462,076       84.0       443,241       72.0       501,275       85.5       18,835       4.2       (39,199 )     (7.8 )
Minority Interests
     117       3,747       0.7       3,446       0.6       3,344       0.6       301       8.7       403       12.1  
 
                                                                  
Total Shareholders’ Equity
     14,498       465,823       84.7       446,687       72.6       504,619       86.1       19,136       4.3       (38,796 )     (7.7 )
 
                                                                  
Total Liabilities & Shareholders’ Equity
   $ 17,118     $ 549,999       100.0     $ 615,223       100.0     $ 586,407       100.0     ($ 65,224 )     (10.6 )   ($ 36,408 )     (6.2 )
 
                                                                  
 
Note :   (1) Amounts in New Taiwan dollars have been translated into U.S. dollars at the rate of NT$32.130 as of September 30, 2008.

 

 

     
(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Three Months Ended September 30, 2008, June 30, 2008, September 30, 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1)
Except for Per Share Amounts and Shares Outstanding)
                                                                                         
    3Q 2008     2Q 2008     3Q 2007     QoQ     YoY  
    USD     NTD     %     NTD     %     NTD     %     Amount     %     Amount     %  
Net Sales
   $ 2,984     $ 92,979       100.0     $ 88,137       100.0     $ 88,955       100.0     $ 4,842       5.5     $ 4,024       4.5  
Cost of Sales
     (1,601 )     (49,885 )     (53.7 )     (47,916 )     (54.4 )     (48,231 )     (54.2 )     (1,969 )     4.1       (1,654 )     3.4  
 
                                                                  
Gross Profit
     1,383       43,094       46.3       40,221       45.6       40,724       45.8       2,873       7.1       2,370       5.8  
 
                                                                  
Operating Expenses
       
Research and Development Expenses
     (192 )     (5,981 )     (6.4 )     (5,404 )     (6.1 )     (4,691 )     (5.3 )     (577 )     10.7       (1,290 )     27.5  
General and Administrative Expenses
     (96 )     (2,979 )     (3.2 )     (3,170 )     (3.6 )     (2,872 )     (3.2 )     191       (6.0 )     (107 )     3.7  
Sales and Marketing Expenses
     (39 )     (1,217 )     (1.3 )     (1,274 )     (1.4 )     (808 )     (0.9 )     57       (4.5 )     (409 )     50.5  
 
                                                                  
Total Operating Expenses
     (327 )     (10,177 )     (10.9 )     (9,848 )     (11.1 )     (8,371 )     (9.4 )     (329 )     3.3       (1,806 )     21.6  
 
                                                                  
 
                                                                                        
Income from Operations
     1,056       32,917       35.4       30,373       34.5       32,353       36.4       2,544       8.4       564       1.7  
 
                                                                  
 
                                                                                        
Non-Operating Income, Net
     43       1,328       1.4       1,725       1.9       1,083       1.2       (397 )     (23.0 )     245       22.5  
Investment Gains
     6       185       0.2       279       0.3       782       0.9       (94 )     (33.6 )     (597 )     (76.3 )
 
                                                                  
Income before Income Tax
     1,105       34,430       37.0       32,377       36.7       34,218       38.5       2,053       6.3       212       0.6  
 
                                                                                        
Income Tax Expenses
     (118 )     (3,658 )     (3.9 )     (3,503 )     (4.0 )     (3,600 )     (4.1 )     (155 )     4.4       (58 )     1.6  
 
                                                                                        
 
                                                                  
Net Income
     987       30,772       33.1       28,874       32.7       30,618       34.4       1,898       6.6       154       0.5  
 
                                                                                        
Minority Interests
     (6 )     (198 )     (0.2 )     (103 )     (0.1 )     (248 )     (0.3 )     (95 )     91.4       50       (20.2 )
 
                                                                                        
 
                                                                  
 
                                                                                        
Net Income Attributable to Shareholders of the Parent
     981       30,574       32.9       28,771       32.6       30,370       34.1       1,803       6.3       204       0.7  
 
                                                                  
 
                                                                                        
Earnings per Share — Diluted
   $ 0.04     $ 1.18             $ 1.10             $ 1.13             $ 0.08       7.5     $ 0.05       4.9  
 
                                                                        
Earnings per ADR — Diluted (2)
   $ 0.19     $ 5.91             $ 5.50             $ 5.64             $ 0.41       7.5     $ 0.27       4.9  
 
                                                                        
 
                                                                                        
Weighted Average Outstanding Shares — Diluted (’M) (3)
             25,850               26,153               26,932                                          
 
Note:
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD31.162 for the third quarter of 2008.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total diluted weighted average outstanding shares were 26,153M and 26,932M shares for 2Q08 and 3Q07 respectively after the retroactive adjustments for stock dividends and stock bonus.

 

 

(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Consolidated Condensed Income Statements
For the Nine Months End September 30, 2008 and 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”) (1)
Except for Per Share Amounts and Shares Outstanding)
                                                         
    For the Nine Months Ended September 30  
    2008     2007     YoY  
    USD     NTD     %     NTD     %     Amount     %  
Net Sales
   $ 8,647     $ 268,595       100.0     $ 228,771       100.0     $ 39,824       17.4  
Cost of Sales
     (4,734 )     (147,041 )     (54.7 )     (131,256 )     (57.4 )     (15,785 )     12.0  
 
                                          
Gross Profit
     3,913       121,554       45.3       97,515       42.6       24,039       24.7  
 
                                          
Operating Expenses
                                                        
Research and Development Expenses
     (536 )     (16,655 )     (6.2 )     (12,934 )     (5.7 )     (3,721 )     28.8  
General and Administrative Expenses
     (284 )     (8,811 )     (3.3 )     (6,926 )     (3.0 )     (1,885 )     27.2  
Sales and Marketing Expenses
     (118 )     (3,674 )     (1.4 )     (2,691 )     (1.1 )     (983 )     36.5  
 
                                          
Total Operating Expenses
     (938 )     (29,140 )     (10.9 )     (22,551 )     (9.8 )     (6,589 )     29.2  
 
                                          
 
                                                        
Income from Operations
     2,975       92,414       34.4       74,964       32.8       17,450       23.3  
 
                                          
 
                                                        
Non-Operating Income, Net
     158       4,923       1.8       5,715       2.5       (792 )     (13.9 )
Investment Gains
     34       1,042       0.4       1,631       0.7       (589 )     (36.1 )
 
                                          
Income before Income Tax
     3,167       98,379       36.6       82,310       36.0       16,069       19.5  
 
                                                        
Income Tax Expenses
     (338 )     (10,497 )     (3.9 )     (7,102 )     (3.1 )     (3,395 )     47.8  
 
                                                        
 
                                          
Net Income
     2,829       87,882       32.7       75,208       32.9       12,674       16.9  
 
                                                        
Minority Interest
     (13 )     (395 )     (0.1 )     (516 )     (0.2 )     121       (23.7 )
 
                                                        
 
                                          
Net Income Attributable to Shareholders of the Parent
     2,816       87,487       32.6       74,692       32.7       12,795       17.1  
 
                                          
 
                                                        
Earnings per Share — Diluted
   $ 0.11     $ 3.34             $ 2.77             $ 0.57       20.6  
 
                                              
Earnings per ADR — Diluted (2)
   $ 0.54     $ 16.72             $ 13.87             $ 2.85       20.6  
 
                                              
 
                                                        
Weighted Average Outstanding Shares — Diluted (’M) (3)
             26,156               26,932                          
 
Note:
 
(1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.064 for nine month ended September 30, 2008.
 
(2)   1 ADR equals 5 ordinary shares.
 
(3)   Total diluted weighted average outstanding shares were 26,932M shares for the nine months ended September 30, 2007 after the retroactive adjustments for stock dividends and stock bonus.

 

 

(TSMC LOGO)
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2008 and for the Three Months Ended September 30, 2008,
June 30, 2008, and September 30, 2007
(Expressed in Millions of New Taiwan Dollars (“NTD”) and U.S. Dollars (“USD”)) (1)
                                         
    Nine Months 2008     3Q 2008     2Q 2008     3Q 2007  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
    USD     NTD     NTD     NTD     NTD  
Cash Flows from Operating Activities:
                                        
Net Income
   $ 2,816     $ 87,487     $ 30,574     $ 28,771     $ 30,369  
Net Income Attributable to Minority Interest
     13       394       198       103       248  
Depreciation & Amortization
     1,949       60,551       20,686       20,034       19,857  
Deferred Income Tax
     68       2,125       410       1,280       668  
Equity in Earnings of Equity Method Investees, Net
     (34 )     (1,042 )     (185 )     (280 )     (782 )
Changes in Working Capital & Others (2)
     282       8,735       4,220       (4,857 )     852  
 
                              
Net Cash Provided by Operating Activities
     5,094       158,250       55,903       45,051       51,212  
 
                                        
Cash Flows from Investing Activities:
                                        
Acquisitions of:
                                        
Marketable Financial Instruments
     (2,213 )     (68,738 )     (40,201 )     (14,635 )     (25,042 )
Investments Accounted for Using Equity Method
     (2 )     (55 )     (55 )     —       (5,810 )
Property, Plant and Equipment
     (1,544 )     (47,965 )     (10,378 )     (22,274 )     (24,917 )
Financial Assets Carried at Cost
     (12 )     (390 )     (87 )     (90 )     (378 )
Proceeds from Disposal or maturity of:
                                        
Marketable Financial Instruments
     2,922       90,782       22,126       41,840       22,282  
Investments Accounted for Using Equity Method
     —       —       —       —       —  
Property, Plant and Equipment
     6       171       140       30       15  
Financial Assets Carried at Cost
     4       126       —       35       255  
Others
     —       14       1,930       (1,310 )     (866 )
 
                              
Net Cash Provided by (Used In) Investing Activities
     (839 )     (26,055 )     (26,525 )     3,596       (34,461 )
 
                                        
Cash Flows from Financing Activities:
                                        
Decrease in Guarantee Deposits
     (20 )     (619 )     (83 )     (164 )     (447 )
Proceeds from Exercise of Stock Options
     8       223       51       91       105  
Bonus Paid to Directors and Supervisors
     (6 )     (177 )     (177 )     —       —  
Repayment of Long-Term Bonds Payable
     —       —       —       —       —  
Cash Dividends Paid for Common Stock
     (2,472 )     (76,779 )     (76,779 )     —       (77,387 )
Repurchase of Treasury Stock
     (1,078 )     (33,481 )     (23,812 )     (6,615 )     —  
Cash Bonus Paid to Employees
     (127 )     (3,940 )     (3,940 )     —       (4,573 )
Others
     (10 )     (322 )     (222 )     (159 )     322  
 
                              
Net Cash Used in Financing Activities
     (3,705 )     (115,095 )     (104,962 )     (6,847 )     (81,980 )
 
                                        
 
                              
Net Increase (Decrease) in Cash and Cash Equivalents
     550       17,100       (75,584 )     41,800       (65,229 )
 
                              
 
                                        
Effect of Exchange Rate Changes and Others (2)
     12       360       2,684       (731 )     166  
 
                                        
Cash and Cash Equivalents at Beginning of Period
     3,058       94,986       185,346       144,277       163,391  
 
                              
 
                                        
Cash and Cash Equivalents at End of Period
   $ 3,620     $ 112,446     $ 112,446     $ 185,346     $ 98,328  
 
                              
 
Note: (1)   Amounts in New Taiwan dollars have been translated into U.S. dollars at the weighted average rate of NTD 31.064 for the nine months ended September 30, 2008.
 
(2)   Certain prior period balances have been reclassified to conform to the current period presentation.

 

 

TSMC 2008 Third Quarter Investor Conference October 30, 2008

 

Agenda Welcome Elizabeth Sun 3Q08 Financial Results and 4Q08 Outlook Lora Ho CEO Comments Rick Tsai Q&A Rick Tsai / Lora Ho

 

Safe Harbor Notice TSMC's statements of its current expectations are forward- looking statements subject to significant risks and uncertainties and actual results may differ materially from those contained in the forward-looking statements. Information as to those factors that could cause actual results to vary can be found in TSMC's Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the "SEC") on April 15, 2008 and such other documents as TSMC may file with, or submit to, the SEC from time to time. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

 

3Q08 Financial Highlights Before expensing of employee profit sharing Total outstanding shares were 25,625mn units on 9/30/08 Annualized ROE for the quarter based on average equity attributable to shareholders of the parent.

 

Income Statements 3Q07 results do not include expenses of employee profit sharing. (1)

 

3Q08 Revenue by Applications

 

3Q08 Revenue by Technology

 

Balance Sheets & Key Indices Asset productivity = Annualized net sales / Average net fixed assets. (1)

 

Cash Flows Free cash flow = Operating cash flow - Capital expenditures. (1)

 

Figures represent number of 6" wafers. Conversion to 8"-equivalent wafers is obtained by dividing this number by 1.78. Figures represent number of 12" wafers. Conversion to 8"-equivalent wafers is obtained by multiplying this number by 2.25. Installed Capacity Overall Capacity +13%; Advanced Capacity +27%

 

Capital Expenditures

 

4Q08 Guidance Revenue is expected to be between NT$69 billion and NT$71 billion, at a forecast exchange rate of 32.73 NT dollars to 1 US dollar averaged over 4Q08. Gross profit margin is expected to be between 34% and 36%. Operating profit margin is expected to be between 21% and 23%.

 

Recap of Recent Major Events TSMC Wins Asia's Best Companies Poll 2008 Held by FinanceAsia to Be Taiwan's Best Managed Companies, Best Corporate Governance, Best Investor Relations, And Most Committed to a Strong Dividend Policy (2008/09/30) TSMC's 28nm to Be a Full Node Process (2008/09/29) TSMC Selected As DJSI Member For Eighth Straight Year and Joins Carbon Disclosure Leadership Index For First Time (2008/09/26) Philips Completes Exit of TSMC Shareholding (2008/08/14) TSMC Board Approves Plan to Buy Back Shares (2008/08/12) TSMC Fab 14, Phase 3 Wins LEED Green Building Certification With "Gold Class" Score (2008/08/07) TSMC Announces Common Share Ex-dividend Date at July 16th, 2008 (2008/07/01) * Please visit TSMC's Web site (http://www.tsmc.com) for details and other announcements.

 

http://www.tsmc.com invest@tsmc.com

 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  Taiwan Semiconductor Manufacturing Company Ltd.
 		  
Date: October 30, 2008  By   /s/ Lora Ho    
    Lora Ho   
    Vice President & Chief Financial Officer