Apple chip maker TSMC’s profit bigger than expected

Taiwan Semiconductor Manufacturing Co (TSMC) projected quarterly revenue well above analysts’ estimates, brushing aside concerns that tighter US sanctions on No 2 customer Huawei Technologies could dampen its business.

Shares in the world’s largest contract chip maker have slid two straight days on worries that Washington will tighten existing restrictions on exports to Huawei, potentially curtailing shipments from TSMC and other non-American firms.

If the US does move ahead, any disruption would be short-term because TSMC could replace some of the lost Huawei business with orders from other customers thanks to the 5G boom, chairman Mark Liu said during a post-earnings conference with analysts.

TSMC has recruited Intel Corp’s former chief lobbyist to gauge the temperature in Washington and lessen any fallout from US-Chinese tensions, including policies involving Huawei.

“We are prepared to deal with this export control regulation,” said Liu, adding that if any new controls were introduced, TSMC would carefully “evaluate product by product eligibility of export”.

But some analysts judged Liu’s assessment too rosy. TSMC may be overestimating the ability of other customers to pick up the slack were its Huawei business to be curtailed, Bernstein analyst Mark Li said.