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.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS