Taiwan Semiconductor Manufacturing Co hiked its revenue outlook after logging record quarterly profit, and painted a bullish picture of demand picking up within the subsequent two years as advanced technologies are adopted more widely.
The processor sector has been among the rare businesses profiting from the coronavirus pandemic with more people investing in premium devices as they spend longer hours at home and as corporations want to add more bandwidth for remote workers.
The world’s largest contract chipmaker said it expects 2020 revenue to jump more than 30%, up from an earlier forecast of over 20% and marking the second quarter in a row it has raised its outlook.
It predicted fourth-quarter revenue of between $12.4 billion and $12.7 billion, compared to $10.4 billion booked in exactly the exact same quarter a year ago.
“COVID has accelerated the digital transformation,” CEO C.C. Wei told an online earnings briefing, adding that strong demand for smartphones and other electronic equipment in addition to 5G technologies had spurred orders for high-end chips.
Wei said TSMC’s clients were currently holding inventories at higher than historical levels due to doubts amid the pandemic and economic anxieties. Even so the business expects demand to pick up in 2021 and 2022, offsetting any inventory correction.
“We don’t worry too much about it,” he explained.
Wei emphasised that TSMC’s standing as the industry leader in advanced chips would maintain it in good stead and that it is predicted to outperform global foundry expansion this year.
Revenue handily beat the organization’s own estimates, climbing 29.2% to $12.1 billion.
TSMC’s advanced chips are employed in high-end smartphones like Apple’s recently unveiled 5G iPhone 12 and in telecommunications technologies and artificial intelligence.
TSMC expects to see 5G-enabled apparatus quickly attain widespread recognition, predicting the uptake for 5G will be faster compared to 4G.
“All countries and regions are preparing to build up (5G) infrastructure right now… a lot of 5G phones will be introduced and that created a higher percentage penetration rate,” Wei said.
This requirement has helped TSMC cancel a loss of requests from Huawei Technologies after the US imposed extensive restrictions on sales to the Chinese telecommunications giant.
A US proposal to also place Semiconductor Manufacturing International Corp (SMIC) about the same trade blacklist has caused a number of their Chinese chipmaker’s clients to preemptively switch on to its Taiwanese rival, analysts have said.
TSMC declined to comment on reports it had applied for a US licence to ship some goods to Huawei. Asked about the consequences of restrictions on SMIC, executives said they were assessing the effect on the semiconductor marketplace.
Stocks of TSMC have jumped about 36 percent so far this season, giving it a market value of $414 billion.
The team at Platform Executive hope you have enjoyed the ‘TSMC lifts revenue estimate as COVID transforms digital demand‘ article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Yimou Lee and Ben Blanchard. Editing by Edwina Gibbs.
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