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.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable