Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday trimmed its revenue growth forecast for this year to about 10 percent, citing a downward trend in high-end smartphone demand and volatile cryptocurrency mining activities.
The Hsinchu-based company in January estimated that revenue would rise by between 10 and 15 percent this year and said it aims for annual growth of 5 to 10 percent through 2010.
“China’s market is starting to pick up slowly in the smartphone segment, but high-end smartphone demand is still soft,” TSMC cochief executive officer C.C. Wei (魏哲家) said at an investors’ conference in Taipei.
Photo: Liao Chen-huei, Taipei Times
However, dwindling demand for premium smartphones would not derail TSMC’s growth plan for its 7-nanometer (nm) technology, Wei said, adding that it is the most advanced chip manufacturing technology available.
About 50 customers have approached the company looking to source 7nm chips, TSMC said.
Revenue from 7nm chips would make up 10 percent of its total revenue this year, largely matching the company projection from three months ago, Wei said.
Uncertainties in cryptocurrency mining demand, which largely hinges on the ups and downs of virtual currency prices, is likely to dampen growth momentum in that area, TSMC said.
The company said the slowdown in high-end smartphone sales would dent its revenue this quarter, as mobile phone components/chips contribute to 55 percent of its revenue.
“TSMC’s revenue in the second quarter is expected to be affected by continuing soft demand for smartphones. This decline will be partially [offset] by high-performing computing [chips],” Wei said.
Revenue should shrink by about 6.6 to 7.8 percent this quarter to between US$7.8 billion and US$7.9 billion, from US$8.46 billion last quarter, TSMC said.
Gross margin should drop to between 47 and 49 percent this quarter, from 50.3 percent last quarter, the company said.
Net profit contracted 9.6 percent quarterly to NT$89.79 billion (US$3.06 billion) from NT$99.29 billion last quarter, but on an annual basis, net profit rose 2.5 percent from NT$87.63 billion, TSMC said.
The company yesterday raised capital spending for this year to between US$11.5 billion and US$12 billion, up from US$10.5 billion to US$11 billion budgeted in January.
The increased budget would be used to expand mask-making capacity to cope with rising customer demand and on a prepayment for next-generation EUV tools, which are crucial if the company wants to continue shrinking transistors cost-effectively, TSMC said.
The firm said it plans to use the EUV equipment to make enhanced versions of its 7nm chips in the second half of next year and to make 5nm chips in 2020.
The company expects its capital expenditure to remain at a high level of between US$10 billion and US$12 billion over next few years.
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