Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its planned capital expenditure for this year to top US$17 billion, from an original budget of US$15 billion to US$16 billion, as 5G infrastructure deployment and high-computing-performance applications (HPC) drive demand for advanced technologies.
The world’s biggest contract chipmaker also revised up its revenue growth forecast for this year to 20 percent, outpacing the foundry industry’s forecast growth of mid-to-high-teens percent and the overall semiconductor industry’s expected “slight” growth.
In April, TSMC forecast that its revenue would grow by 15 to 19 percent this year.
Photo: David Chang, EPA-EFE
Due to the US’ restrictions on exports containing US technologies to China’s Huawei Technologies Co (華為), TSMC said it has since May 15 stopped taking new orders from its second-biggest customer after Apple Inc.
TSMC has no plans to ship wafers to Huawei after Sept. 15 as Washington has not made a final decision yet, it added.
Asked whether TSMC would be able to fill its 5-nanometer capacity after losing Huawei’s orders, TSMC chief executive officer C.C. Wei (魏哲家) told an earnings conference: “We should have no problem.”
The company is working closely with customers to fill up the vacuum left by Huawei, Wei said.
Its clients are preparing for 5G and HPC applications, as well as trying to ensure supply security in light of the COVID-19 uncertainty, he said.
The US ban does not include shipments of standard products to Huawei, TSMC chairman Mark Liu (劉德音) said, adding that Huawei might shift strategy “by procuring general-purpose products.”
On Wednesday, market researcher Omdia said that Huawei might replace smartphone chips designed by its semiconductor unit Hisilicon Technologies Co (海思) with those designed by MediaTek Inc (聯發科) for general use, rather than customized for Huawei.
MediaTek is also a customer of TSMC.
TSMC reported a record net profit of NT$120.82 billion (US$4.08 billion) for last quarter, up 81 percent from NT$66.77 billion a year ago and an increase of 3.3 percent from NT$116.99 billion in the previous quarter.
Earnings per share rose to NT$4.66 from NT$2.57 a year earlier and NT$4.51 in the prior quarter.
“Moving into the third quarter of 2020, we expect our businesses to be supported by strong demand for our industry-leading 5-nanometer and 7-nanometer technologies, driven by 5G smartphones, HPC and IoT [Internet of things]-related applications,” Wei said.
Revenue is forecast to rise between 7.32 and 9.74 percent to US$11.2 billion and US$11.5 billion this quarter, from US$10.38 billion last quarter, the company said.
However, gross margin is expected to drop to between 50 and 52 percent this quarter from 53 percent last quarter, it said.
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