Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said it remained optimistic about prospects this year, with mobile devices — mainly smartphones — continuing to fuel its revenue growth.
Smartphones are currently “the big thing” that is driving the chipmaker’s growth and will continue to be the growth engine over the next two years until the next big thing comes along, TSMC chairman Morris Chang (張忠謀) told reporters on the sidelines of the annual meeting of the Taiwan Semiconductor Industry Association.
“I think the second quarter and the third quarter will be very good [quarters],” Chang said. “I’m optimistic about this year.”
Chang said in January that TSMC would have a second consecutive year of double-digit percentage revenue growth this year.
Last year, TSMC’s revenue jumped 17.8 percent to NT$597.02 billion (US$19.52 billion) from NT$506.75 billion in 2012.
Advanced 28-nanometer and 20-nanometer chips, which are mainly used in smartphones, will be the growth engines, the chipmaker said.
Each smartphone sold worldwide contributes US$8 to TSMC’s revenue, Chang said.
The chipmaker forecast that worldwide smartphone shipments would surge 25 percent annually to 1.25 billion units this year.
Benefiting from smartphones’ rapid growth, TSMC and certain chipmakers, including its clients — handset chip designers Qualcomm Inc and MediaTek Inc (聯發科) — have expanded their revenues by double-digit percentages annually, or nearly 20 percent, Chang said in a speech yesterday.
Those companies have outpaced the global semiconductor industry, which grew only 3 to 5 percent over the past few years, he said.
Over the decades, chipmakers have made windfall profits as, following Moore’s Law, denser and smaller chips have reduced costs, Chang said.
However, as semiconductor companies reach the limits of Moore’s Law, which Chang predicted would apply for just another five to six years, they would need to find new growth drivers, he said.
The next big thing after smartphones is the “Internet of Things,” including Google Inc’s Google Glass and other wearable devices, Chang said.
The Internet of Things will be the growth engine for next five to 10 years, he said.
“Semiconductor companies will not be the biggest beneficiaries. Google, Amazon, Apple, Alibaba (阿里巴巴), or Tencent Holdings (騰訊) will make lucrative profits 10 years from now,” he said.
Semiconductor companies will be the “basic supplier,” Chang said.
No matter which of the aforementioned companies succeed, they will need semiconductors, he said.
Any company that can supply semiconductors to those firms would have a faster growth rate than the semiconductor industry as a whole, he said.
Companies that are able to provide advanced chip packaging services, microelectromechanical systems sensors, or low-power technologies, that can cut energy consumption by 10 times that of current technologies, would see respectable growth, he said.
“TSMC has to be ready with those key technologies,” he said.
Separately, the TSMC chairman said that he felt sorry about the ongoing political deadlock over the cross-strait service trade agreement and hoped that the stalemate could be resolved peacefully and rationally.