Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted its weakest quarterly net profits in about four-and-half years, largely due to flagging demand for premium smartphones and customers’ inventory corrections.
TSMC’s net profits plunged 31.6 percent to NT$61.39 billion (US$1.99 billion) in the quarter ending on March 31, compared with NT$89.79 billion in the same period last year.
That represents a decline of 38.6 percent from NT$99.98 billion in the previous quarter.
The result fell short of analysts’ expectations, as Credit Sussie Group AG’s had forecast NT$62.11 billion, while Citigroup Market Inc had said NT$61.6 billion.
The Hsinchu-based company, which is the sole chip supplier to Apple Inc’s iPhone X series, said the worst was over and it expected a strong rebound in the second half of this year, buoyed mainly by chips used in clients’ new high-end smartphones, as well as those for the initial deployment of 5G and high-performance-computing applications.
Those applications would boost demand for its 7-nanometer chips and improve its factory utilization, reversing the overcapacity expected in the first half of the year, TSMC said.
“Moving into the second quarter of this year, while economic factors and mobile product seasonality still linger, we believe we might have passed the bottom of cycle of our business,” chief executive C.C. Wei (魏哲家) told an investors’ conference. “We are seeing customers’ demand stabilizing.”
TSMC said it expects customers to reduce inventory substantially to approach the seasonal level in the middle of this year.
For the whole year of this year, TSMC still expects a “slight” growth in revenue from last year’s NT$1.03 trillion, Wei said.
That compares with the zero growth estimate given for the worldwide semiconductor industry, excluding the memorychip sector.
Smartphone platform and HPC platforms, two of the company’s major product categories, were expected to grow at a high-single-digit percentage this year, excluding cryptocurrency chips, Wei said.
“We are gaining market share along with our [smartphone] customers,” Wei said. “Silicon content for high-end smartphones is also on the rise.”
HiSilicon Technologies Co (海思半導體), the chip designing arm of China’s Huawei Technologies Co Ltd (華為), is one of TSMC’s top clients.
With 15 percent market share worldwide, Huawei saw its ranking move up one notch last quarter to become the world’s No. 2 smartphone vendor, from third place in the fourth quarter of last year, market researcher TrendForce Corp’s (集邦科技) ranking showed.
For this quarter, TSMC expects revenue to grow about 7 percent to between US$7.55 billion and US$7.65 billion, compared with NT$218.7 billion last quarter.
The growth is largely attributable to wafer shipments, which last quarter were affected by a problem in February with the photoresist material used in wafer production.
Gross margin is to improve to between 43 percent and 45 percent this quarter from 41.3 percent last quarter, the chipmaker predicted.
It is still aiming for 50 percent growth in gross margin for the second half of this year and in the long run, the company said.
TSMC kept its capital spending for this year unchanged at a range between US$10 billion and US$11 billion.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
RSS