Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday lowered its revenue growth forecast for this year to 6.5 percent, owing to flagging demand from China for chips used in cryptocurrency mining tools.
That marked the second downward revision after the Hsinchu-based chipmaker in July reduced its projection for this year to between 7 and 9 percent for the same reason.
At the beginning of this year, TSMC had set a growth target of between 10 and 15 percent.
Photo: Liao Chen-huei, Taipei Times
TSMC remains upbeat about its growth prospects over the next five years.
“We [will] continue to stay at 5 to 10 percent [annual] growth rate. It would probably be closer to the high-end of that range,” TSMC chief executive officer C.C. Wei (魏哲家) told an investors’ conference in Taipei.
Wei added that he sees minimal impact from the escalating trade war between the US and China.
For this quarter, the company is expected to benefit from strong demand for its 7-nanometer chips used in high-end smartphones, as well as new-generation graphics and artificial intelligence chips, it said.
TSMC is one of two foundry companies capable of supplying 7-nanometer chips, which it expects to contribute close to 10 percent of its total revenue this year and to climb to more than 20 percent next year.
“However, this growth would be partly offset by continuing weakness in cryptocurrency mining demand and inventory management by our customers,” TSMC chief executive financial officer Lora Ho (何麗梅) said.
Fourth-quarter revenue is expected to range between US$9.35 billion and US$9.45 billion, Ho said.
That would represent growth of between 10.13 and 11.31 percent from US$8.49 billion last quarter and an annual growth of between 1.52 and 2.6 percent from US$9.21 billion.
TSMC counts Chinese virtual currency mining firm Bitmain Technologies Ltd (比特大陸) among its major clients.
Despite sagging cryptocurrency mining demand, this has not deterred TSMC’s capacity expansion plans in China, it said.
The chipmaker plans to double the capacity at its 12-inch fab in Nanjing to 20,000 wafers a month next year, it said.
Gross margin this quarter is expected to fall between 47 and 49 percent from 47.4 percent in the thir quarter, Ho said.
During the quarter ending Sept. 30, TSMC’s net profit fell 0.9 percent to NT$89.07 billion (US$2.88 million) from NT$89.93 billion in the same period last year, with earnings per share dropping to NT$3.44 from NT$3.47.
On a quarterly basis, net profit jumped 23.2 percent from NT$72.29 billion, or NT$2.79 per share.
TSMC shares yesterday closed 0.84 percent lower at NT$236.50 in Taipei trading, ahead of the company’s earnings conference.
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