TSMC Raises 2020 Sales Outlook After Profit Smashes Estimates, , on October 15, 2020 at 6:31 am

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(Bloomberg) — Taiwan Semiconductor Manufacturing Co. raised its full-year revenue forecast again after posting a stronger-than-expected 36% increase in profit, buoyed by orders from Apple Inc. ahead of the new iPhones.The world’s largest contract chipmaker now expects 2020 sales to climb more than 30% in dollar terms, compared with a previous forecast of growth of more than 20%. For the current quarter, revenue should be between $12.4 billion and $12.7 billion, while gross margin will be between 51.5% and 53.5%, Chief Financial Officer Wendell Huang told analysts.Previously disclosed monthly numbers showed sales climbed to a record NT$356.4 billion ($12.4 billion) in the quarter, suggesting that Apple’s main iPhone chipmaker is benefiting from a gradual recovery in the global economy. The company’s business typically kicks into high gear in the months before Apple unveils its new phones and the holiday season. It also received a boost during the quarter as second-largest customer Huawei Technologies Co. raced to stockpile supplies before a U.S. ban on shipments to the Chinese telecom giant came into effect last month.On Tuesday, Apple unveiled its latest iPhone lineup, saying two new models will come out on Oct. 23 while two other models will arrive three weeks later. The Cupertino, California-based company expects to build at least 75 million new 5G iPhones this year, roughly in line with its previous flagship launch, Bloomberg News has reported.“Increasing semiconductor content from 5G smartphones, continuous AMD CPU market-share gain, Apple silicon, and CMOS image sensors should continue to drive upside in 2021 and beyond,” Citigroup analysts Roland Shu and Grant Chi wrote in a research note.Net income for the three months to September rose to an all-time high of NT$137.3 billion, versus the average analyst estimate of NT$126 billion. Gross margin improved slightly to 53.4%, topping the company’s own guidance.The most-advanced 5-nanometer process technology — used to make Apple’s A14 chips — accounted for about 8% of total revenue during the quarter, while 7nm and 16nm made up 35% and 18%, respectively. By business segment, TSMC’s smartphone business expanded 12%, while high-performance computing (HPC) posted the strongest growth, jumping 25%.TSMC continues to invest in expanding and upgrading technology, anticipating strong demand from 5G smartphones as well as for server chips in a post-pandemic era. Executives said Thursday they expect capital spending of about $17 billion in 2020, the high end of its previously forecast range. TSMC shed 1.3% on Thursday in Taipei ahead of the earnings. The shares have surged roughly 83% from their March lows amid signs that the company is bouncing back from the worst of the coronavirus-induced disruptions.What Bloomberg Intelligence SaysTaiwan Semiconductor Manufacturing’s 3Q sales of NT$356 billion, despite a strengthening New Taiwan dollar, is 5% above company guidance. This may be driven by stronger-than-expected 5-nanometer A14 chipset orders from Apple and mature-node chips, in addition to rush orders from Huawei. It also implies that TSMC’s 3Q operating profit may beat consensus by more than 11%, by our calculations, assuming an operating margin of 41%.- Charles Shum and Simon Chan, analystsRead the research here.Read more: TSMC Third Quarter Net Income Beats Estimates(Updates with company guidance starting in first paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

TSMC Raises 2020 Sales Outlook After Profit Smashes Estimates(Bloomberg) — Taiwan Semiconductor Manufacturing Co. raised its full-year revenue forecast again after posting a stronger-than-expected 36% increase in profit, buoyed by orders from Apple Inc. ahead of the new iPhones.The world’s largest contract chipmaker now expects 2020 sales to climb more than 30% in dollar terms, compared with a previous forecast of growth of more than 20%. For the current quarter, revenue should be between $12.4 billion and $12.7 billion, while gross margin will be between 51.5% and 53.5%, Chief Financial Officer Wendell Huang told analysts.Previously disclosed monthly numbers showed sales climbed to a record NT$356.4 billion ($12.4 billion) in the quarter, suggesting that Apple’s main iPhone chipmaker is benefiting from a gradual recovery in the global economy. The company’s business typically kicks into high gear in the months before Apple unveils its new phones and the holiday season. It also received a boost during the quarter as second-largest customer Huawei Technologies Co. raced to stockpile supplies before a U.S. ban on shipments to the Chinese telecom giant came into effect last month.On Tuesday, Apple unveiled its latest iPhone lineup, saying two new models will come out on Oct. 23 while two other models will arrive three weeks later. The Cupertino, California-based company expects to build at least 75 million new 5G iPhones this year, roughly in line with its previous flagship launch, Bloomberg News has reported.“Increasing semiconductor content from 5G smartphones, continuous AMD CPU market-share gain, Apple silicon, and CMOS image sensors should continue to drive upside in 2021 and beyond,” Citigroup analysts Roland Shu and Grant Chi wrote in a research note.Net income for the three months to September rose to an all-time high of NT$137.3 billion, versus the average analyst estimate of NT$126 billion. Gross margin improved slightly to 53.4%, topping the company’s own guidance.The most-advanced 5-nanometer process technology — used to make Apple’s A14 chips — accounted for about 8% of total revenue during the quarter, while 7nm and 16nm made up 35% and 18%, respectively. By business segment, TSMC’s smartphone business expanded 12%, while high-performance computing (HPC) posted the strongest growth, jumping 25%.TSMC continues to invest in expanding and upgrading technology, anticipating strong demand from 5G smartphones as well as for server chips in a post-pandemic era. Executives said Thursday they expect capital spending of about $17 billion in 2020, the high end of its previously forecast range. TSMC shed 1.3% on Thursday in Taipei ahead of the earnings. The shares have surged roughly 83% from their March lows amid signs that the company is bouncing back from the worst of the coronavirus-induced disruptions.What Bloomberg Intelligence SaysTaiwan Semiconductor Manufacturing’s 3Q sales of NT$356 billion, despite a strengthening New Taiwan dollar, is 5% above company guidance. This may be driven by stronger-than-expected 5-nanometer A14 chipset orders from Apple and mature-node chips, in addition to rush orders from Huawei. It also implies that TSMC’s 3Q operating profit may beat consensus by more than 11%, by our calculations, assuming an operating margin of 41%.- Charles Shum and Simon Chan, analystsRead the research here.Read more: TSMC Third Quarter Net Income Beats Estimates(Updates with company guidance starting in first paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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