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.
Taiwan’s long-term economic competitiveness will hinge not only on national champions like Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) but also on the widespread adoption of artificial intelligence (AI) and other emerging technologies, a US-based scholar has said. At a lecture in Taipei on Tuesday, Jeffrey Ding, assistant professor of political science at the George Washington University and author of "Technology and the Rise of Great Powers," argued that historical experience shows that general-purpose technologies (GPTs) — such as electricity, computers and now AI — shape long-term economic advantages through their diffusion across the broader economy. "What really matters is not who pioneers
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
INFLATION CONSIDERATION: The BOJ governor said that it would ‘keep making appropriate decisions’ and would adjust depending on the economy and prices The Bank of Japan (BOJ) yesterday raised its benchmark interest rate to the highest in 30 years and said more increases are in the pipeline if conditions allow, in a sign of growing conviction that it can attain the stable inflation target it has pursued for more than a decade. Bank of Japan Governor Kazuo Ueda’s policy board increased the rate by 0.2 percentage points to 0.75 percent, in a unanimous decision, the bank said in a statement. The central bank cited the rising likelihood of its economic outlook being realized. The rate change was expected by all 50 economists surveyed by Bloomberg. The
RSS