Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies processors for Apple Inc’s iPhones, expects its revenue for this year to grow by nearly 10 percent from a year earlier on smartphone demand.
The growth rate will fall in the “upper end of this forecast range,” TSMC co-chief executive officer Mark Liu (劉德音) told reporters on the sidelines of the annual SEMICON Taiwan trade show in Taipei.
Hsinchu-based TSMC earlier this year projected that its annual revenue would grow by between 5 percent and 10 percent from last year’s NT$843.5 billion (US$27 billion).
Liu said that smartphone demand dipped in February amid global economic uncertainty, but was “back to normal in the second half.”
“Demand is not a problem,” he said.
Over the next five years, smartphones will continue to be the biggest force driving sales for TSMC and the overall semiconductor industry, Liu said.
TSMC predicted a composite annual growth rate of between 5 percent and 10 percent in the company’s revenue in the period from last year through 2020.
Half of the company’s growth will still come from the smartphone segment, Liu said.
Upgrade demand from lower-end smartphone users and more new features for high-end models — such as dual cameras and high-speed 4G and 5G data transmission — would stimulate chip demand, he said.
Emerging demand for high-performance chips used in data centers and those for autonomous cars, virtual reality, augmented reality, “artificial intelligence” and Internet of Things will also help boost chip sales for the company and the overall industry alike, Liu said.
“We see applications have been proliferating. The use of semiconductors has been moved from mobile computing to ubiquitous computing,” Liu said.
Pokemon Go is an early example of applications for augmented and virtual reality, which are also to become available for commercial use, including tourism, he said.
Commenting on the company’s development of 7-nanometer (nm) chips, Liu said work is well on track and the firm is ahead of its competitors.
TSMC expects to ramp up production of 7nm chips in 2018, with the chips to be used in high-end smartphones as well as autonomous vehicles, he said.
TSMC shares rose 2.79 percent to NT$184 yesterday, bringing the firm’s market capitalization to a record high of NT$4.77 trillion.
Separately, Minister of Economic Affairs Lee Chih-kung (李世光) yesterday said that the local semiconductor industry is expected to continue to lead the growth of Taiwan’s industrial sector.
Speaking at the opening ceremony of SEMICON, Lee said the industry plays a critical role in the global semiconductor market and has become the base for Taiwan to further develop its information technology sector.
Taiwan is home to the world’s largest pure-wafer foundry operator, the leading chip packaging and testing services provider and the second-largest IC designer, Lee said.
He said the local industry has laid a strong foundation for Taiwan’s industrial development by setting up a comprehensive supply chain, including components and modules for chip production, while the local semiconductor industry has the capability to roll out devices for the booming Internet of Things.
With its strong presence in the global market, the local industry is expected to develop more applications and create further business opportunities for Taiwan’s industrial sector, he said.
Additional reporting by CNA
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