TSMC forecasts 19% sales growth for 2020

Taipei,  Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, said Thursday that it remains upbeat about its business outlook and is expecting sales growth of 19 percent this year, despite the economic impact of the COVID-19 coronavirus pandemic.

At an investor conference, TSMC CEO C.C. Wei (魏哲家) said the company is optimistic about demand for emerging technologies such as 5G applications and high performance computing (HPC) devices.

TSMC also has confidence in its advanced processes and is likely to outperform the wider semiconductor industry this year, Wei said, forecasting an annual sales growth of 14-19 percent this year for the company.

With the global semiconductor industry feeling the effects of the COVID-19 pandemic, its 2020 sales are unlikely to meet the earlier estimate of 8 percent annual growth, and instead will either stay flat or drop slightly, Wei said, adding that the forecast does not include memory chipmakers.

In the pure foundry sector, the 2020 sales growth will not meet the earlier projection of 17 percent but will range between 7 and 13 percent, he said, responding to questions by institutional investors.

At the investor conference, TSMC reported a 0.8 percent sequential increase and 90.6 percent year-on-year growth in its first-quarter net profit to a record NT$$116.99 billion (US$3.90 billion).

TSMC’s earnings per share for the first quarter was NT$4.51, up from NT$4.47 in the fourth quarter of last year.

Analysts said that solid demand for 5G applications and HPC devices helped TSMC weather the usual first-quarter slow season as well as the COVID-19 coronavirus pandemic.

According to Wei, TSMC is expected to continue to benefit from its efforts to develop chips on advanced processes, and it is projecting that its 7 nanometer, 7-plus nm and 6nm processes will make up about 30 percent of its total sales in 2020.

He said the 5nm process, which went into mass production this year, will contribute 10 percent to TSMC’s total sales this year.

Citing TSMC’s upbeat business outlook, Wei said the company has decided to retain its 2020 capital expenditure plan at between US$15 billion and US$16 billion, the highest in its history.

At the investor conference, TSMC CFO Wendell Huang (黃仁昭) said the company is expected to post US$10.1 billion to US$10.4 billion in consolidated sales for the second quarter, a sequential decline of only about 1 percent, as 5G and HPC applications will help the company weather the impact of the COVID-19 pandemic and the slow season.

An earlier market estimate had projected a 5 percent quarterly drop in TSMC’s second-quarter consolidated sales.

Huang said TSMC’s gross margin — the difference between revenue and cost of goods sold — is expected to range between 50 and 52 percent in the second quarter, compared with 51.8 percent in the first quarter.

The company’s operating margin — the difference between sales, the cost of goods sold and operating expenses — for the second quarter is forecast at 39-41 percent, compared with 41.4 percent in the first quarter, according to Huang.

Source: Focus Taiwan News Channel

Leave a Reply

Your email address will not be published. Required fields are marked *