Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported higher-than-expected quarterly revenue, signaling the chip giant is benefiting from market share gains to weather an industry slowdown.
Revenue at the world’s largest contract chipmaker rose 48 percent to about NT$613 billion in the third quarter, according to Bloomberg’s calculations. Analysts estimated NT$603 billion on average.
Rising revenue at Apple Inc’s most important chipmaker signals that the largest players in the US$550 billion semiconductor industry might avoid the severe downturn investors have feared, helped by resilient demand for some electronics products in the face of rising interest rates and soaring inflation.
Photo: Ritchie B. Tongo, EPA-EFE
Morgan Stanley this week projected a return to growth for the chip industry by the second half of next year.
Other chipmakers warned in the past few weeks that they are facing a tougher market as inventories build up and orders are being cut by data center and consumer tech clients. Micron Technology Inc and Kioxia Holdings Corp are cutting output to try and rebalance supply and avert a price crash.
TSMC, the world’s most advanced maker of silicon chips, has benefited from Apple launching new types of chips to boost the performance of its devices. Still, Bloomberg last month reported that the Californian company was backing off plans to increase production of its new iPhones, raising questions about underlying electronics demand.
“For now, overseas capacity expansion will be front and center, especially in the US and Japan, as TSMC pushes to meet customers’ diversification requests and rises to the challenge of growing competition from Samsung and Intel. Rapidly rising depreciation and material costs, coupled with increasing uncertainty in smartphone demand, are putting a cap on its gross margin,” Bloomberg Intelligence analyst Charles Shum (沈明) said.
To diversify beyond chips for electronics, TSMC is also seeking growth in areas such as next-generation vehicles. The Taiwanese company is betting on growing demand for semiconductors as vehicles become electrified and more digitized.
Meanwhile, United Microelectronics Corp (UMC, 聯電) saw revenue last month fall 0.51 percent to NT$25.22 billion from NT$25.35 in August, ending 11 straight months of growth. That brought UMC’s third-quarter revenue to a record high of NT$75.4 billion, up 4.64 percent from the prior quarter.
Smaller foundry company Vanguard International Semiconductor Corp (世界先進) yesterday reported a 25.73 percent decline in revenue to NT$3.69 billion due to a reduction in wafer shipments. That was the weakest monthly revenue in about 14 months for the supplier of display driver ICs and power management chips.
During the quarter ending Sept. 30, Vanguard’s revenue plummeted 13.27 percent sequentially to NT$13.27 billion. It was in line with the chipmaker’s revenue forecast of NT$12.9 billion to NT$13.3 billion, as customers, notably flat-panel makers, digested inventory.
Additional reporting by Lisa Wang
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