By Aries Poon
TAIPEI-- Taiwan Semiconductor Manufacturing Co. posted a record
profit in the fourth quarter, making 2014 the company's best year,
largely buoyed by computing-chip orders for Apple Inc.'s new
iPhones.
TSMC, the world's largest contract chip maker by revenue, said
Thursday that net profit for the three months ended Dec. 31 was
79.99 billion New Taiwan dollars (US$2.51 billion), up from
NT$44.81 billion a year earlier. Revenue in the fourth quarter rose
53% from a year earlier to NT$222.52 billion, also a record.
Earnings for the entire year rose to new high NT$263.90 billion, up
40% from NT$188.15 billion in 2013.
Gross profit margin, a measure of profitability, rose to 49.7%
from 44.5% a year earlier.
Last year, TSMC beat out Samsung Electronics Co. for a contract
from Apple, as the Taiwan-based chip maker was among the first to
migrate to 20-nanometer chip process technology. That migration
allowed TSMC to produce chips that are faster, smaller and consume
less power.
But TSMC had said it would lose some of its orders to its
competitors in 2015. Intel is entering the foundry model of
manufacturing chips based on others' designs, which TSMC pioneered,
and Samsung is set to launch its own next-generation chip
technology.
As competition escalates, TSMC earmarked record capital
expenditure on new technology for this year. The company plans to
fork out US$11.5 billion to US$12 billion on developing and
building advanced technology and facilities. In 2014, TSMC spent
US$9.52 billion on capital expenditures.
The Taiwanese company plans to deliver a prototype 10-nanometer
chip based on ARM Holdings PLC's design in the fourth quarter in
2015. TSMC Chairman Morris Chang said last year that the company
has committed a "blank check" to developing the finer 10-nanometer
process technology "in the shortest time possible."
TSMC also said it expects to rake in NT$221 billion to NT$224
billion revenue in the first quarter of 2015, similar to the
NT$222.52 billion it made in the fourth quarter of 2014, but still
higher than the first quarter in 2014.
Write to Aries Poon at aries.poon@wsj.com
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