tsmc presentation by: david bruns jamie runge joe peterson

TSMCPresentation by:

David BrunsJamie RungeJoe Peterson

TSMC World Wide

Company Overview

• Establishment• Worlds LARGEST semiconductor foundry

▫Semiconductor?▫Wafer?

• Manufacturing capacity exceeds 7 million 8-inch equivalent wafers.

• Revenues represents 50% of the dedicated foundry segment in the semiconductor industry

TSMC core values

• Integrity• Commitment• Innovation• Customer partnership

Business philosophy

• Integrity• Maintaining a consistent

focus • Globalization• Long-term vision and

strategies• Treating customer as

partners

• Building quality into all aspects of our business

• Constant innovation• Fostering a dynamic and

fun work environment• Keeping communication

channels open• Caring for employees

and shareholders and being a good corporate citizen

products

•Production of semi conductors•Customers design their own semi

conductors•TSMC offers many different options for

there production of semi conductors

options•Embedded Processors•Digital Signal Processing•Communications and Networking•High-speed Interfaces•Mixed Signal•RF•Multimedia•Programmable logic

sizes•32nm•45nm•55nm•65nm•90nm•0.13um•0.18um•0.25um•0.35um•Greater that 0.5um

Wafers? & Semiconductors?

Wafers Semiconductors

What is a semi conductor?

•It is a device made up of silicon that allows for current to past by one way, while not letting it past the other way. This is critical for most all electronic devices.

What they are used in

Business units

•Advanced Technologies•Mainstream Technologies•Sales and marketing

Business units•Each Business unit is responsible for their

own formulation, Development, and execution of advanced and mainstream products.

•They will also be held financially responsible for their own units

•The structure of the company is to allow flexibility for the employees and greater profits.

Advanced technologies

•Reports to Mark Liu, senior VP•This is for more advanced products that

have a limited demand right now but are expected to take off in the future.

•Advanced technology platforms include a wireless SoC platform, a consumer technology platform, and a PC and network technology platform.

Mainstream technologies

•Reports to C.C Wei, senior VP•They produce the products that are

popular right now and are used in most technologies at the moment but are not highly advanced.

•Most of the revenue•Mainstream technology platforms cover

specific applications including power IC, display driver IC, CMOS image sensor, microcontroller, and RFID.

Sales and marketing

•Reports to Jason Chen, Vice President•They are responsible for keeping track of

the sales and getting their products out to the public.

Revenue Growth

TSMC’s Revenues have grown steadily in the past 20 years, reaching a record high of NT $317.41 Billion in 2006.

Revenue since 1988

Consolidated Financial Statements

•Directly and indirectly majority owned

•TSMC’s percentage ownership less than 50%

•TSMC has a controlling interest

•All significant intercompany balances and transactions are eliminated upon consolidation

•TSMC Global•TSMC-NA•TSMC-Japan•TSMC-Korea•TSMC

International•TSMC Europe•TSMC Partners•TSMC Shanghai•Chi Cherng 36%•Hsin Ruey 36%•Emerging Alliance

99.5%•GUC 38%•VTAF II 98%•VTAF III 98%

* Unit: NT$ Thousands

2006 2005 DeltaNet Sales 317,407,171 266,565,070 50,842,101Cost of Sales 161,597,081 148,362,196 13,234,885Gross Profit 155,810,090 118,202,874 37,607,216

Operating Expenses 28,545,396 27,234,315 1,311,081

Income from Operations 127,264,694 90,968,559 36,296,135

Non-Operating Income and Gains 9,705,592 9,399,360 306,232

Non-Operating Expenses and Losses 3,608,078 6,104,672 (2,496,594)

Income Before Income Tax 133,362,208 94,263,247 39,098,961Income Tax Expense (7,773,711) (630,579) (7,143,132)Cumulative effect of accounting principles net of tax benefit of NT $82,062 thousand 1,606,749 0 1,606,749Net Income 127,195,246 93,632,668 33,562,578

* Unit: NT$ Thousands

Consolidated Condensed Income Statement

*Unit: NT$ Thousands

Assets 2006 2005 DeltaCurrent Assets 260,317,168 212,300,790 48,016,378Long Term Investments 53,895,151 42,382,494 11,512,657Property, Plant and Equiptment 254,094,190 244,823,292 9,270,898Goodwill 5,984,993 6,010,601 -25,608Other assets 13,193,657 13,992,412 -798,755Total Assets 587,485,159 519,509,589 67,975,570

Current Liabilities 46,860,531 35,122,227 11,738,304Long Term Liabilities 22,873,542 30,410,171 -7,536,629Other Liabilities 8,612,970 7,738,483 874,487Total Liabilities 78,347,043 73,270,881 5,076,162

Captial Stock 258,296,879 247,300,246 10,996,633Capital Stock surplus 54,107,498 57,117,886 -3,010,388Retained Earnings 197,124,532 142,771,034 54,353,498Others -629,550 -640,742 11,192Treasury stock -918,075 -918,075 0Minority Interests 1,156,832 608,359 548,473Total Shareholders Equity 509,138,116 446,238,708 62,899,408Total Liabilities and Shareholders Equity 587,485,159 519,509,589 67,975,570

Consolidated Condensed Balance Sheet

*Unit: NT$ Thousands

2006 2005 DeltaCash Flows From Operating Activities 204,996,986 157,225,238 47,771,748Cash Flows from Investing Activities (119,723,352) (77,652,217) (42,071,135)Fash Flows from Financing activiites (63,783,353) (57,968,687) (5,814,666)Cash & Cash Equivalents, EOY 117,837,192 96,483,707 21,353,485Investing Activities affecting both Cash and Noncash Items 78,737,265 79,878,724 (1,141,459)Noncash Financing Activities 8,310,620 1,568,517 6,742,103

Consolidated Condensed Statement of Cash Flows

2002 2003 2004 2005 2006Capital Structure Analysis Debt Ratio (%) 24.22 19.17 20.1 14.1 13.34

Long-term Fund to Fixed Assets Ratio (%) 140.48 175.65 166.58 194.69 209.38Liquidity Analysis Current Ratio (%) 257.43 547.46 288.57 604.46 555.51

Quick Ratio (%) 223.68 502.2 261.62 549.94 506.39Time Interest Earned (times) 10.54 26.4 53.92 67.69 152.46

Operating Performance Analysis Average Collection Turnover (times) 9.09 9.03 9.22 7.84 8.84Days Sales Outstanding 40.15 40.41 39.6 46.54 41.28Average Inventory Turnover (time) 10.46 10.98 10.21 8.91 8.25Average Inventory Turnover Days 34.89 33.24 35.74 40.94 44.22Average Payment Turnover (times) 23.5 15.43 14.75 14.37 15.41Fixed Assets Turnover (times) 0.66 0.96 0.99 1.09 1.25Total Assets Turnover (times) 0.42 0.5 0.51 0.51 0.54

Profitability Analysis Return on Total Assets (%) 6.33 12.3 20.68 18.89 23.12Return on Equity (%) 7.54 15.12 25.36 22.16 26.64Operating Income to Paid in Capital Ratio (%) 15.86 25.31 38.05 36.78 49.27Pre-tax Income to Paid in Capital Ratio (%) 13.66 25.25 39.55 38.12 52.22Net Margin (%) 13.3 23.28 35.9 35.13 4.07Basic Earnings Per Share (NT$) 0.82 1.82 3.58 3.63 4.93Diluted Earning Per Share (NT$) 0.82 1.82 3.58 3.63 4.92

Cash Flow Cash Flow Ratio (%) 247.31 381.44 239.6 447.65 437.46Cash Flow Adequqcy Ratio (%) 106.37 132.59 146.18 154.53 156.75Cash Flow Reinvestment Ratio (%) 17.81 17.97 18.54 12.64 14.36

Leverage Operating Leverage 4.15 3.23 2.38 2.31 1.99Financial Leverage 1.09 1.04 1.02 1.02 1.01

Consolidated Financial Analysis from 2002-2006

Questions?