Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that revenue this quarter would expand about 11 percent sequentially, supported by strong demand for artificial intelligence (AI) and 3-nanometer chips.
TSMC has seen nascent signs of stabilizing demand for computers and smartphones in the past few months, which has helped drive down customer inventories to healthy levels this quarter and heralds “healthier growth” for next year, it said.
“We are receiving some urgent purchase orders asking for more chips to meet demand,” TSMC chief executive officer C.C. Wei (魏哲家) told investors. “That gave us a hint that inventory control has already become healthier than we thought.”
Photo: An Rong Xu, Bloomberg
The semiconductor downcycle is “very close” to hitting the bottom, Wei said.
However, it remains unclear whether the recovery would be a “sharp rebound,” given macroeconomic uncertainty and customers’ caution on inventory management, he said.
Customers are showing “stronger and stronger” demand for AI chips, as more companies are infusing edge devices, mainly computers and smartphones, with AI functions, he said.
The US’ new curbs on AI chip exports to China would have “limited” effect, at least in the short term, Wei said.
The near-term impact should be “manageable” and TSMC is evaluating the long-term consequences, he said.
To meet demand for AI chips, TSMC is boosting chip-on-wafer-on-substrate (CoWoS) packaging capacity through 2025, Wei said.
Its goal is to double its CoWoS capacity by the end of next year, he said.
TSMC yesterday kept its capital spending for this year unchanged at about US$32 billion.
Revenue this quarter is to increase by between 8.8 and 13.43 percent to between US$18.8 billion and US$19.6 billion, the company said.
Full-year revenue would be US$68.47 billion to US$69.27 billion, down 8.71 to 9.76 percent from last year, but better than a 10 percent decline TSMC estimated earlier this year, thanks to the ramp-up of 3-nanometer technology, it said.
Gross margin this quarter is expected to drop to between 51.5 and 53.5 percent, from 54.3 percent last quarter, due to dilution from higher production of 3-nanometer chips, TSMC said.
Net profit expanded 16 percent quarter-on-quarter, but dropped 25 percent annually to NT$211 billion (US$6.53 billion) last quarter, or earnings per share of NT$8.14, it said.
TSMC said it is confident it would fend off competition from Intel Corp, which aims to reclaim its technology leadership in 2025 with an 18A chip.
TSMC said its 2-nanometer technology would be the most advanced when it is introduced in 2025.
The company is not concerned about market share loss, Wei said, adding that its enhanced 3-nanometer technology, dubbed N3P, would have comparable performance to the 18A chip, but enjoys advantages in time-to-market, technology maturity and cost structure.
TSMC’s 2-nanometer chip with a backside-power-rail design would outperform the N3P and 18A chips, he added.
TSMC said that it is making progress on infrastructure, utilities and equipment installation at its first US fab in Arizona, as the chipmaker targets mass production of 4-nanometer chips there by the first quarter of 2025.
In Japan, its first fab in Kumamoto is to enter mass production of specialty chips late next year as scheduled, it said.
The fab would utilize its 28-nanometer, 22-nanometer, 16-nanometer and 12-nanometer technologies, it said.
In Europe, TSMC plans to start building a factory in Dresden, Germany, in the second half of next year, with mass production set in late 2027, it said.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS