TSMC sees modest fourth quarter revenue growth, shrugs
off trade war impact
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[October 18, 2018]
By Jess Macy Yu and Yimou Lee
TAIPEI (Reuters) - Taiwan Semiconductor
Manufacturing Co (TSMC) <2330.TW> offered a modest fourth-quarter
revenue growth outlook, predicting weaker sales of high-performance
computers for cryptocurrency mining will partially offset solid demand
for chips from smartphones.
TSMC <TSM.N>, the world's largest contract chipmaker whose clients
include iPhone maker Apple <AAPL.O>, also shrugged off concerns over
Sino-U.S. trade tensions hurting its sales, betting investment in
advanced chipmaking technology will help cushion the impact.
In a move likely to further consolidate TSMC's technological leadership,
key rival GlobalFoundries said recently that it would not compete in the
latest generation of chipmaking technology that is hotly sought after by
high-end device makers.
"Despite the current market uncertainties, our business will benefit
from a continued steep ramp (up) of 7 nanometre for several high-end
smartphones," Chief Financial Officer Lora Ho told the company's
"However this will be partially offset by continued weakness in
cryptocurrency mining demand and inventory management by customers," she
TSMC forecast its fourth-quarter revenue at $9.35 billion-$9.45 billion,
marginally higher from $9.21 billion a year ago.
It warned the mid-tier smartphone market will shrink this year, but
predicted premium phones will continue to show a positive growth,
helping it ride out the slowdown, as TSMC mainly serves the high-end
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A logo of Taiwan
Semiconductor Manufacturing Co (TSMC) is seen at its headquarters in
Hsinchu, Taiwan August 31, 2018. REUTERS/Tyrone Siu/File Photo
Analysts said solid demand for Apple's new iPhone models, estimated from
contract electronics maker Foxconn's revenues for September, will also support
TSMC's growth in the fourth quarter, a crucial year-end holiday season for
TSMC reported July-September profit of T$89.07 billion ($2.9 billion), in line
with the T$89.0 billion average forecast drawn from 23 analysts, according to
Revenue rose 1.9 percent to $8.49 billion, higher than the company's own
estimate of $8.28 billion-$8.38 billion, as well as the average $8.4 billion
estimate of 25 analysts, according to Refinitiv data.
The results came after semiconductor industry bellwether ASML Holding NV <ASML.AS>,
a supplier to TSMC, posted better-than-expected third quarter results and gave a
bullish outlook on Wednesday, helping assuage fears of slackening demand.
Shares of TSMC, which rivals Intel Corp <INTC.O> as the world's biggest
semiconductor firm by market value, closed down 0.8 percent at T$236.50 on
Thursday ahead of the financial results, compared with a 0.3 percent fall for
the benchmark index <.TWII>.
(Reporting By Jess Macy Yu and Yimou Lee; Editing by Miyoung Kim and Muralikumar
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