TSMC to post high Q1 revenue due to smartphones, 28nm tech
Taiwan Semiconductor Manufacturing Corp. (TSMC) has predicted that it will register record sales for 2Q14 as demand increases for chips the foundry makes for its customers supplying to the high-end smartphone market. The company expects a 22 per cent quarterly increase in sales to between $5.96 billion and $6.06 billion, gross margins between 47.5 per cent and 49.5 per cent, and operating margins between 36.5 per cent and 38.5 per cent, according to CFO Lora Ho.
TSMC's management said that it has seen strong orders across all segments since mid-January.
"We now have improved demand outlook from the following three perspectives," co-chief executive Mark Liu said in a conference call with analysts Wednesday to discuss TSMC's Q1 financial results. The smartphone segment "appears healthier than we expected last quarter. The acceleration of LTE infrastructure buildup, LTE smartphone proliferation and the increased silicon content of smartphone improved our demand outlook."
TSMC's year is off to a good start. For 1Q14, it posted sales gains of 11.6 per cent from a year earlier and 1.7 per cent from 4Q13 to $4.92 billion. Net income jumped 21 per cent from a year earlier and 6.1 per cent from Q4 to $1.59 billion. Q1 results were better than expected, according to Ho, who attributed them to inventory replenishment at many key semiconductor customers.
From Q4, revenue jumped eight per cent in the communications sector, two per cent in computer, and two per cent in industrial but declined 14 per cent in consumer.
"We were able to capture the bigger marketshare of customers' upside demand, thanks to the better performance and higher yield and reliability for our advanced technologies," Ho said.
TSMC manufactures many of the chips designed into high-end smartphones, including 64bit application processors, multi-mode baseband processors, multiband receivers, image sensors, MEMS devices, near field communication chips and fingerprint sensors, Liu said.
This year, he said, its silicon content (measured in average wafer value per unit) will rise to $13.90 per high-end smartphone in 2014, versus $10.80 last year. For midrange and low-end phones, the figure will remain at $6 and $3.60, respectively.