Tue, Jun 11, 2019 - Page 11 News List

TSMC revenue increases, despite Huawei ban risks

TRADE TENSIONS:TSMC chairman Mark Liu said that Huawei, one of the company’s biggest clients, has reduced its orders due to lower smartphone demand

By Lisa Wang  /  Staff reporter

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday posted the best monthly revenue in five months, shrugging off potential downside risks from the US ban on Huawei Technologies Co (華為).

Revenue rose 7.7 percent month-on-month to NT$80.44 billion (US$2.56 billion) last month, compared with NT$74.69 billion in April, a company statement said.

On an annual basis, revenue slid 0.7 percent from NT$80.97 billion.

In April and last month, revenue totaled NT$155.13 billion, indicating that the chipmaker would have to make NT$82.21 billion this month to reach its goal of between US$7.55 billion and US$7.65 billion in revenue this quarter.

TSMC chairman Mark Liu (劉德音) on Wednesday last week said that Huawei, one of the company’s biggest clients, has reduced its orders due to reduced demand for smartphones.

Liu declined to endorse the company’s remarks on May 24 that its financial forecast for this quarter and this year would remain unchanged.

The chipmaker has anticipated a mild annual growth in revenue this year.

TSMC saw aggregated revenue in the first five months shrink 9 percent year-on-year to NT$373.84 billion from NT$410.92 billion.

Because of the short-term headwinds, Goldman Sachs last week trimmed its revenue forecast for TSMC this quarter to NT$228.57 billion from NT$235 billion, below the chipmaker’s revenue guidance.

“With the trade tensions between US and China further escalating following the US Department of Commerce’s announcement of Huawei export controls, we see rising risks for TSMC as global semiconductor suppliers become even more cautious on global end demand,” Goldman Sachs analyst Bruce Lu said in a report.

Lu estimated that TSMC’s direct and indirect exposures to Huawei would be about the low-teens percentage of its revenue this year.

United Microelectronics Corp (UMC, 聯電) yesterday posted a 1.32 percent increase in revenue to NT$12.24 billion for last month from NT$12.08 billion in April, marking the highest level since October last year.

That was an annual decline of 6.37 percent from NT$13.08 billion.

UMC in April estimated that wafer shipments would increase about 6 percent this quarter from last quarter, and that the average selling price in US dollar terms would go up by 3 percent quarter-on-quarter, implying about 10 percent quarterly revenue growth.

Meanwhile, handset chip designer MediaTek Inc (聯發科) yesterday posted revenue of NT$19.12 billion for last month, down 11.28 percent from NT$21.55 billion in April.

That represented an annual decline of 6.3 percent from NT$20.41 billion.

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