Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday cut its revenue growth forecast for this year as the COVID-19 pandemic is dampening demand for 5G smartphones and other consumer electronics, although it held US$15 billion to US$16 billion in capital spending for this year.
The supplier of chips for iPhones said that it is continuing to invest in advanced 7-nanometer (nm), 5nm and 3nm technology, as 5G deployments and high-performance-computing-related applications are expected to drive growth for next several years.
It said it plans to start volume production of 3nm technology in 2022 at its fab in Tainan, which would make TSMC the first contract chipmaker to offer the technology.
Photo: Ritchie B. Tongo / EPA-EFE
The company is also “evaluating its US fab plan,” TSMC chairman Mark Liu (劉德音) said in response to an investor’s question.
“If we do a US fab, it has to be a leading-edge fab, or close to a leading-edge fab,” Liu said.
However, the cost gap remains a challenge, he said.
The question came as investors watch proposed changes to US trade rules that would affect TSMC.
The US government is mulling a rule that would require an export license for semiconductors that are produced using US-designed tools and software in a bid to thwart Huawei Technology Co (華為).
“There might be some near-term impact” from the rule change if it is enacted, Liu said.
Meanwhile, the COVID-19 pandemic is weakening TSMC’s growth and revenue this year is expected to grow by between 15 percent and 18 percent annually, slower than the growth of “several percentage points above 17 percent” it estimated three months ago, the company said.
TSMC slashed its revenue forecast for the global semiconductor industry, saying it would have no growth this year or contract slightly. In January, the firm predicted annual growth of 8 percent.
The new forecast was based on the assumption that the pandemic would be well contained by June, the company said.
“We do observe that some end-markets have softened. Some consumer electronics, such as smartphones, have become much softer than we thought,” TSMC chief executive officer C.C. Wei (魏哲家) told investors.
“We expect some demand from our customers will be adjusted due to the COVID-19 outbreak, but TSMC will be less affected compared with other foundries,” Wei said.
Revenue this quarter is expected to slide 0.6 percent quarter-on-quarter to between US$10.1 billion and US$10.4 billion as weaker demand for smartphones and other consumer electronics would be offset by growth in high-performance-computing applications, such as servers, driven by a telecommuting trend, TSMC said.
Gross margin this quarter will be little changed from a range of 50 percent to 52 percent, compared with 51.8 percent last quarter, it said.
TSMC’s net profit surged 90.6 percent to a record NT$116.99 billion (US$3.88 billion) last quarter, compared with NT$61.39 billion in the same period last year. That translated into earnings per share of NT$4.51, up from NT$2.37 a year earlier.
On a quarterly basis, net profit rose 0.8 percent to NT$116.04 billion, or NT$4.47 per share.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
The global server market is expected to grow 12.8 percent annually this year, with artificial intelligence (AI) servers projected to account for 16.5 percent, driven by continued investment in AI infrastructure by major cloud service providers (CSPs), market researcher TrendForce Corp (集邦科技) said yesterday. Global AI server shipments this year are expected to increase 28 percent year-on-year to more than 2.7 million units, driven by sustained demand from CSPs and government sovereign cloud projects, TrendForce analyst Frank Kung (龔明德) told the Taipei Times. Demand for GPU-based AI servers, including Nvidia Corp’s GB and Vera Rubin rack systems, is expected to remain high,
RSS