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Taiwan Semiconductor Manufacturing Co. Ltd. Q2 2008 Earnings Call

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2008-08-05 18:43:15.0

Tags: Taiwan Semiconductor Manufacturing Co. Ltd., Taiwan Semiconductor

Question-and-Answer Session

At this time, we will open the floor to questions. [Operator Instructions]. And our first question will come from the line of Randy Abrams with Credit Suisse. Please proceed.

Randy Abrams - Credit Suisse

Yes. Hi, good evening. I wanted to ask a follow-up on the pricing comments where you mentioned 2009 won't be up versus 2008, could you talk about... is the pricing outcome what you are expecting coming into discussions with customers and now what were the implications, should we expect slower price erosion on a node-for-node basis and potentially up for blended ASPs?

Dr. Rick Tsai - President & Chief Executive Officer

Yes, Randy, I think you're right. I mean, I believe you're right. For any specific technologies, we have the pricing, as I just said, not higher than the average of the 2008, which of course have slowed down the decline of the 2009 prices. And, of course, as the mix continued to migrate, I think the blended pricing can go either way, yes.

Randy Abrams - Credit Suisse

Okay. And on the cost pressure, will you talk about some inflationary pressures, maybe discuss the magnitude of some of the big variables we've heard like energy costs, raw materials? And then for operating expenses, do you see any inflationary pressures, how should we expect Opex to trend the next few quarters?

Ms. Lora Ho - Vice President, Chief Financial Officer

On the cost front, the inflation, cost... mainly own utility cost and also some other costs associated with the utility cost increase. There were many forecasts on the cost of sales area, not too much on the operating expenses. In terms of the magnitude, we believe the impact will be... will not be very significant, we would think about the low single digits in our range and we're trying to do everything we can to manage our costs. So, we are trying to reduce the impact to our bottom line.

Randy Abrams - Credit Suisse

Okay. And one final question for 45 and...

Operator

As a reminder, please limit your questions to two questions at a time. Our next question will come from the line of Shailesh Jaitly with Nomura Securities. Please proceed.

Shailesh Jaitly - Nomura Securities International, Inc.

Yes. Hi. Thanks for taking my question. Firstly, for 0.11 and 0.13 micron, there was quite a pronounced decline. So, if you could detail right as to what product segments is it coming from, is it more fabulous or ideal centric?

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