Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted its first revenue decline in five months, reporting NT$72.28 billion (US$2.31 billion) for last month amid customers’ inventory correction.
Sales contracted by 10.48 percent from October’s NT$80.74 billion. However, compared with the same period last year, revenue soared 63 percent from NT$44.33 billion.
The contraction was not a surprise, as TSMC co-chief executive Mark Liu (劉德音) had said in October that “cautious inventory adjustment actions taken by some of our customers will bring slower fourth-quarter demand.”
The company could still post record revenue for the current quarter, thanks to strong demand for 4G smartphones in China and increased orders for TSMC’s advanced 20-nanometer (20nm) chips, Liu said.
TSMC, which supplies processors for Apple Inc’s iPhone 6 series, has estimated that revenue for this quarter could grow by between 4 and 5 percent sequentially to between NT$217 billion and NT$220 billion, raising its total revenue this year by 27 percent to a record NT$757.29 billion.
TSMC forecast that revenue for next year would grow by 15 to 20 percent from this year, thanks to strong demand for its 20nm chips, new 16nm FinFET chips and 28nm chips, as well as less-advanced chips from its 8-inch factories.
Barclays Capital Securities Taiwan Ltd is also optimistic that TSMC’s growth momentum would carry into next year, adding that the company’s current growth forecast is much higher than its previous forecast of 10 percent annual expansion.
Moreover, the Hsinchu-based company might increase its capital spending for next year to more than US$12 billion, compared with an initial estimate of US$10 billion made in October, Barclays Capital analyst Andrew Lu (陸行之) said in a report released yesterday.
This year, TSMC plans to spend US$9.6 billion on new equipment mostly to boost its 20nm capacity.
The brokerage downplayed the impact of TSMC’s potential market share loss to rivals in the 16nm FinFET chip market next year and in 2016, and raised its share price target for TSMC to NT$180 from NT$170.
The upgrade has factored in the seasonal weakness next quarter after Apple ends ramp-up of its iPhone 6 series, Lu said.
Barclays’ 12-month target price implies 32.35 percent upside from TSMC’s closing price of NT$136 yesterday, Taiwan Stock Exchange data showed.
The brokerage also revised upward its earnings forecast for TSMC by 10 percent for next year and 11 percent for 2016, citing stronger revenue and margins.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS