Apple chip maker TSMC’s profit soars on iPhone demand as it sticks to aggressive investment plans
- Washington is said to be considering curbs on TSMC’s sales to Huawei, which relies on the chip maker to produce its most advanced silicon.
Taiwan Semiconductor Manufacturing Co. is sticking with plans for aggressive capital investments in 2020, a sign from the technology bellwether of resilient demand despite a pandemic-induced downturn.
TSMC, a barometer for the tech industry thanks to its heft in the global supply chain, on Thursday lowered its revenue outlook for the year by a few percentage points to reflect the new Covid-19 reality. But it still expects robust demand for the semiconductors in datacenters that are now hosting an unprecedented surge in online activity.
On Thursday, executives adhered to their goal of earmarking US$15 billion to US$16 billion for capital spending in 2020, up from last year’s US$14.9 billion. And they forecast revenue growth of about 30 per cent this quarter.
In the longer term, the chip maker to Apple and Huawei Technologies will still have to contend with uncertainty as Covid-19 spreads across the globe. Taiwan’s largest company however is relatively more resistant to a downturn thanks to a commanding position in the production of high-end chips needed for everything from datacenters and gaming to video streaming. It also makes semiconductors for laptops, phones and other devices that people are buying for home offices.
The world’s largest contract chip maker said on Thursday it expects revenue of between US$10.1 billion and US$10.4 billion from April to June. That forecast followed a near-doubling of net income to NT$116.99 billion (US$3.9 billion) for the three months ended March, when demand for advanced silicon remained steady during the pandemic.
That helped offset a 9 per cent quarter-on-quarter slide in revenue from smartphones. Executives hedged their outlook for revenue this year on Thursday, saying it will rise by a mid- to high-teens percentage from a previous forecast for growth of more than 17 per cent.