Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted its weakest quarterly net profits in about four-and-half years, largely due to flagging demand for premium smartphones and customers’ inventory corrections.
TSMC’s net profits plunged 31.6 percent to NT$61.39 billion (US$1.99 billion) in the quarter ending on March 31, compared with NT$89.79 billion in the same period last year.
That represents a decline of 38.6 percent from NT$99.98 billion in the previous quarter.
The result fell short of analysts’ expectations, as Credit Sussie Group AG’s had forecast NT$62.11 billion, while Citigroup Market Inc had said NT$61.6 billion.
The Hsinchu-based company, which is the sole chip supplier to Apple Inc’s iPhone X series, said the worst was over and it expected a strong rebound in the second half of this year, buoyed mainly by chips used in clients’ new high-end smartphones, as well as those for the initial deployment of 5G and high-performance-computing applications.
Those applications would boost demand for its 7-nanometer chips and improve its factory utilization, reversing the overcapacity expected in the first half of the year, TSMC said.
“Moving into the second quarter of this year, while economic factors and mobile product seasonality still linger, we believe we might have passed the bottom of cycle of our business,” chief executive C.C. Wei (魏哲家) told an investors’ conference. “We are seeing customers’ demand stabilizing.”
TSMC said it expects customers to reduce inventory substantially to approach the seasonal level in the middle of this year.
For the whole year of this year, TSMC still expects a “slight” growth in revenue from last year’s NT$1.03 trillion, Wei said.
That compares with the zero growth estimate given for the worldwide semiconductor industry, excluding the memorychip sector.
Smartphone platform and HPC platforms, two of the company’s major product categories, were expected to grow at a high-single-digit percentage this year, excluding cryptocurrency chips, Wei said.
“We are gaining market share along with our [smartphone] customers,” Wei said. “Silicon content for high-end smartphones is also on the rise.”
HiSilicon Technologies Co (海思半導體), the chip designing arm of China’s Huawei Technologies Co Ltd (華為), is one of TSMC’s top clients.
With 15 percent market share worldwide, Huawei saw its ranking move up one notch last quarter to become the world’s No. 2 smartphone vendor, from third place in the fourth quarter of last year, market researcher TrendForce Corp’s (集邦科技) ranking showed.
For this quarter, TSMC expects revenue to grow about 7 percent to between US$7.55 billion and US$7.65 billion, compared with NT$218.7 billion last quarter.
The growth is largely attributable to wafer shipments, which last quarter were affected by a problem in February with the photoresist material used in wafer production.
Gross margin is to improve to between 43 percent and 45 percent this quarter from 41.3 percent last quarter, the chipmaker predicted.
It is still aiming for 50 percent growth in gross margin for the second half of this year and in the long run, the company said.
TSMC kept its capital spending for this year unchanged at a range between US$10 billion and US$11 billion.
Local suppliers of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) appear to be divided over whether they should follow the chipmaker and also set up production facilities in the US, after TSMC announced that it would increase its investment in Arizona. While some TSMC suppliers, including clean-room design service provider United Integrated Services Co (漢唐集成), have set up plants in the US, others, such as IC testing and analysis provider Materials Analysis Technology Inc (閎康科技), have hesitated to make the move because of high production costs in the US. TSMC on Tuesday announced that it would increase its planned US$12 billion investment in
Netherlands-based ASML Holding NV, a leading global supplier of semiconductor production equipment, is considering bringing its European suppliers to Taiwan, doubling down on its supply-chain deployment in the country, Vice Premier Shen Jong-chin (沈榮津) said yesterday. That follows ASML’s announcement that it would build manufacturing facilities in New Taipei City’s Linkou District (林口) to support international customers and the development of the semiconductor industry. RELOCATION Shen did not disclose details about ASML’s new efforts to relocate European supply chains to Taiwan. ASML is to begin construction on the New Taipei City project in July, Shen said during a speech at a technology forum
MORE ADVANCED CHIPS: The company is planning to build a second, 3-nanometer fab in Arizona, TSMC said ahead of a ‘tool-in’ ceremony at its first plant near Phoenix Apple Inc is to be the biggest customer of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new Arizona factories, Apple CEO Tim Cook wrote on Twitter yesterday. “Apple silicon unlocks a new level of performance for our users. And soon, many of these chips can be stamped ‘Made in America.’ The opening of TSMC’s plant in Arizona marks a new era of advanced manufacturing in the US — and we are proud to become the site’s largest customer,” he wrote. Cook’s tweet came as TSMC held a “tool-in” ceremony for its US$12 billion wafer fab in Arizona on Tuesday, which marked the beginning
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is to build a wafer fab deploying 1 nanometer (nm) process technology at the Longtan (龍潭) campus of Hsinchu Science Park (新竹科學園區), Hsinchu Science Park Bureau Director-General Wayne Wang (王永壯) said yesterday. The bureau completed a pilot project in the middle of last month for the third expansion phase of the Longtan Science Park (龍潭科學園區) in Taoyuan to accommodate the new TSMC plant, Wang told a news conference. The pilot expansion project has been submitted to the National Science and Technology Council, which would next forward the project to the Cabinet for approval, Wang said. “The efforts