Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported better-than-expected quarterly revenue, providing another signal that electronics demand is holding up better than feared.
The world’s largest contract chipmaker booked NT$534.1 billion (US$17.9 billion) of revenue for the second quarter, compared with analysts’ average estimate of NT$519 billion.
The results from Apple Inc’s most important chipmaker might allay investors’ worst fears about the impact of weakening demand and soaring costs on the US$550 billion semiconductor industry. On Thursday, Samsung Electronics Co also reported a better-than-anticipated 21 percent jump in revenue, triggering an Asian stock rally.
Photo: Tyrone Siu, Reuters
While concerns linger about the longer-term impact of a potential global recession, investors seized on Samsung’s top-line expansion as a sign that chip stocks might have been oversold.
TSMC might be able to exceed its goal of growing sales by 30 percent in US dollar terms this year, Haitong International Securities (海通國際證券) analyst Jeff Pu (蒲得宇) said.
“TSMC’s second-quarter sales is slightly lower than the most recent market expectations,” Pu said. “But the company’s third-quarter revenue may outperform consensus, aided by its price hike and Apple’s new product launch.”
TSMC, the world’s most advanced maker of silicon chips, has benefited from its most important customer. Over the past year and a half, Apple has launched five types of Mac chips. The Taiwanese firm also continues to ride the auto industry’s growing demand for semiconductors, as cars become more digitized.
Signs are emerging that the chip supply issues that plagued gadget companies and automakers for more than a year are easing. Auto executives have said they are seeing an improvement in component supply, while delivery times for chips fell by one day last month.
Shares of TSMC yesterday closed up 2.1 percent in Taipei trading — ahead of the revenue announcement, but are still down 24 percent this year after a broader tech selloff on recession worries.
“Robust demand for high-performance computing and automotive chips should prevail, while negative impacts from a weaker smartphone-chip demand outlook may not kick in until 4Q,” Bloomberg Intelligence analyst Charles Shum (沈明) wrote in a note ahead of TSMC’s announcement yesterday.
Separately, Vanguard International Semiconductor Corp (世界先進), a foundry service provider 28 percent-owned by TSMC, yesterday reported 53.7 percent in annual revenue growth to NT$5.5 billion last month due to robust shipments and capacity increases.
That helped Vanguard’s second-quarter revenue hit a historical high of NT$15.31 billion, matching its revenue forecast of between NT$15.2 billion and NT$15.6 billion. Last quarter’s revenue expanded 50.68 percent from NT$10.16 billion a year earlier, or a quarterly increase of 13.49 percent from NT$13.49 billion.
Power management ICs were the biggest revenue contributor to Vanguard in the first quarter, accounting for about 59 percent.
Despite foundry’s robust growth in the first half, TrendForce Corp (集邦科技) said the sector is entering a correction period, with order cuts for driver ICs used in large displays and chips that integrate touch and display driver ICs, due to sluggish demand for smartphones and TVs.
Order adjustments have lately spread to power management ICs, CMOS image sensors and microcontrollers used in consumer electronics, it said on Thursday.
The latest industry corrections could lead to lower utilization rates at 8-inch fabs — from 100 percent in the first half of the year to between 90 and 95 percent in the second half, it said.
Some foundry services providers with greater exposures to consumer electronic chips might struggle to stay above 90 percent, it added.
Additional reporting by Lisa Wang
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