TSMC beats third-quarter earnings and revenue expectations

Lloyd Doyle
October 19, 2017

For the third quarter, net income dropped 7.1 percent to NT$89.93 billion from NT$96.76 billion past year.

Mark Liu (劉德音), president and co-chief executive officer of TSMC, told the investor conference that TSMC's sales for the fourth quarter are expected to range between US$9.1 billion and US$9.2 billion, up about 10 percent from the third quarter in USA dollar terms.

"Even though demand was slightly dampened by supply chain inventory reduction, our customers' third-quarter growth was largely healthy", said co-Chief Executive Officer Mark Liu.

2 said founder and Chairman Morris Chang would retire in June.

Shares in TSMC, the world´s largest contract chipmaker, are up by 68% this year as the company continues to benefit from rising chip demand, especially for smartphones. There is also the threat from mainland China which is fostering a domestic chip industry.

Earnings topped NT$89.9 billion, beating the average forecast of NT$88.2 billion, according to analysts polled by Thomson Reuters.

In the third quarter, TSMC's gross margin stood at 49.9 percent, down from 50.8 percent seen in the second quarter, while its operating margin remained unchanged from a quarter earlier at 38.9 percent, the chip maker said.

The outfit forecast revenue growth of about 10 percent in the fourth quarter when sales begin for Apple's iPhone X, which is widely expected to carry TSMC-made chips. The device follows the recently launched iPhone 8 whose sales are reportedly slower than those of predecessors.

TSMC raised this year's capital spending forecast by eight percent to mainly to accelerate capacity of 7nm chip manufacturing technology.

In the third quarter, shipments of 10-nanometer accounted for 10 percent of total wafer revenue.

Other reports by Iphone Fresh

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