Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies chips for Apple Inc’s iPhone 7 series, yesterday said this quarter would be a stronger-than-expected period, benefiting from constantly increasing demand for premium smartphones.
Bucking the downtrend in fourth quarters over the past few years, TSMC expects revenue for this quarter to drop by only 1 percent to 2 percent, or between NT$255 billion and NT$258 billion (US$8.03 billion and US$8.12 billion), compared with NT$260.41 billion last quarter.
Chips for mobile phones and other communications devices were the biggest revenue source for TSMC, accounting for 60 percent last quarter.
“High-end smartphone demand is better than we expected. The deployment of the 4G [network] in China and upgrades in emerging markets has also driven demand,” TSMC co-chief executive officer Mark Liu (劉德音) told an investors’ conference in Taipei.
As demand remains healthy, inventory reduction is expected to be “relatively mild” in the current quarter, Liu said.
Customers might see inventory increase by about two days more than the seasonal level this quarter, Liu added.
TSMC’s revenue this year is expected to increase as much as 12 percent from NT$843.5 billion last year, outpacing the industry’s 1 percent annual growth, Liu said.
Gross margins are likely to be between 50.5 and 52.5 percent during the current quarter, compared with last quarter’s 50.7 percent, the chipmaker said.
TSMC is aiming to maintain its gross margins at about 50 percent over the next five years, company chief financial officer Lora Ho (何麗梅) said.
Capital spending this year is to increase to more than US$9.5 billion, slightly lower than a previous estimate of between US$9.5 billion and US$10.5 billion, Ho said.
The company’s positive outlook came as it reported another record profit of NT$96.76 billion for last quarter, up 33.4 percent from NT$72.51 billion in the second quarter. On an annual basis, last quarter’s figure jumped 28.4 percent from NT$75.33 billion.
“TSMC’s third-quarter performance surpassed expectations as sales of iPhone 7 models were better than expected, while Samsung Electronics Co’s Note 7 recall crisis also affected performance,” Taishin Securities Investment Advisory Co’s (台新投顧) Mason Li (李鎮宇) said.
Li estimated that up to 5 million additional iPhone units will be sold in the current quarter, as Note 7 users switch to new smartphones.
“TSMC has a chance to set a record for its fourth-quarter earnings in the Note 7 aftermath,” he said.
TSMC also shared its long-term business outlook with both investors and analysts.
Liu said high-performing computing devices, including data centers and virtual reality gadgets, would replace mobile phones as the biggest revenue growth driver in 2019.
The global high-performance computing device market is expected to reach US$15 billion in 2020, Liu said.
TSMC has viewed the automotive and the Internet of Things (IoT) sectors as its two key growth drivers in revenue over the next five years, growing at an annual compound rate of between 5 and 10 percent.
The global automotive-related chip market is likely to surge from US$4 billion last year to US$6 billion in 2020, while the worldwide IoT market is likely to triple from US$2 billion to US$6 billion during the same period, Liu said.
As for the company’s progress in developing advanced technologies, Liu said it is “well on track,” adding that the company is scheduled to ship its first batch of 10-nanometer chips in the first quarter next year.
Regarding 7-nanometer technology development, Liu said: “We are confident that we are ahead of competitors.”
TSMC said it is scheduled to ramp up production of 7-nanometer chips in the first quarter of 2018.
Additional reporting by AFP
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the