Taiwan Semiconductor Manufacturing Co (TSMC)(TPE: 2330) said on Jan. 15 that the company’s net profit for 2014 rose more than 40% than what it earned in 2013.
Market analysis said that TSMC’s increasing net profits were the result for the global market’s growing demand for mobile devices.
The world’s biggest contract chip maker said that its net profit totaled US$8.32 billion for 2014, which was up 40.3% from a year earlier. Its earnings per share stood at US$0.31, compared with US$0.22 recorded a year ago.
For 2014, TSMC’s gross margin rose 2.4 percentage points from a year earlier to 49.5%. During the fourth quarter, the company posted US$2.49 billion in net profits, up 4.8% from the third quarter. The fourth quarter’s earnings per share rose to US$0.1 from the third quarter’s US$0.09. Between last October and last December, TSMC’s gross margin was 49.7%, within the company’s previous estimate of between 48% and 50%, but down from the third quarter’s 50.5%.
In the meantime, its fourth-quarter consolidated sales rose 6.4% from a quarter earlier to US$6.95 billion on the back of orders from Apple (NASDAQ: AAPL) for its A8 processor production. TSMC said that chips made on its advanced 20 nanometer process accounted for 21% of its fourth-quarter sales, while chips made on the 28nm process made up 30%.
In related news, United Microelectronics Corp (UMC)(TPE: 2303), TSMC’s competitor and the second-largest contract chip maker in Taiwan, is planning to launch trial production of chips made on the advanced 14 nanometer process, which is the company’s newly developed production technology.
The move to start the 14nm process trial production is aimed at taking on TSMC and South Korea’s Samsung Electronics Co (KRX: 005930) — at a time when major chip suppliers around the world are gearing up to improve their technology processes in a bid to secure more orders from mobile device vendors.
UMC has built a 14nm Fin Field Effect Transistor (FinFET) process production line with a monthly capacity of about 3,000 units in preparation for the trial production.
The FinFET is a 3D transistor structure that allows the chip to run faster than previous processes when using the same amount of power, or at the same speed on less power.