Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said revenue would grow at a quarterly pace of 10 percent this quarter to an all-time high, fueled by the brisk demand for chips made on its advanced 10 nanometer (nm) process technology.
The growth would help boost the chipmaker’s revenue expand 8.8 percent this year, attaining its 5-year goal of between 5 and 10 percent in compound annual growth, the company said.
“For the fourth quarter, we now forecast strong revenue growth of 10 percent quarter-on-quarter, driven by the ramp-up of our 10nm technology,” TSMC co-CEO Mark Liu (劉德音) said.
TSMC supplies 10nm chips to Apple Inc and Huawei Technology Inc (華為). It said the revenue contribution from the 10nm chips might rise to 25 percent this quarter, from 10 percent last quarter.
“Our customers have seen very healthy third-quarter growth. We saw continuous strong growth from automotive, the Internet of Things and high-performance computing, including cryptocurrency mining,” Liu said.
Revenue this quarter is to rise to between US$9.1 billion and US$9.2 billion, compared with last quarter’s NT$252.11 billion (US$8.34 billion). Half of last quarter’s revenue came from handset chips.
Over the next five years, Liu said smartphones, high-performance computing, automotive and the Internet of Things would be the major growth engines.
The total available wafer market for high-performance computing is expected to expand at an annual compound double-digit growth rate in the next five years, starting from US$11.2 billion this year, TSMC predicted.
To support the multi-year growth target, TSMC said that capital spending over the next few years would be slightly higher than US$10 billion per year.
This year, the company plans to spend a record amount of US$10.8 billion to accelerate its capacity buildup of 7nm chips ahead of mass production in the first half of next year.
In the third quarter, TSMC’s net income surged 35.7 percent to NT$89.93 billion, compared with NT$66.27 billion in the previous quarter. That represented an annual contraction of 7.1 percent from NT$96.76 billion.
Gross margin dropped to 49.9 percent from 50.8 percent in the previous quarter, diluted by the ramp-up of 10nm chip, while the operating margin remained at 38.9 percent, the company said.
Gross margin is forecast to stay at between 48 percent and 50 percent this quarter, it said.
Next quarter, “there is still seasonality in smartphone segment. We will follow the seasonality,” said C.C. Wei (魏哲家), another co-CEO. The first quarter is usually a slack season for electronics industry.
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