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.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last