TSMC posts record-high Q4 revenue, net profit

By Christine Chou, The China Post

TAIPEI, Taiwan — Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the world’s largest contract chipmaker and a major supplier to Apple Inc., Thursday announced record-high revenue and net profit for the fourth quarter of last year. It reported consolidated revenue of NT$262.23 billion, net income of NT$100.20 billion and diluted earnings per share of NT$3.86 (US$0.61 per ADR unit) for the fourth quarter. In U.S. dollars, the fourth-quarter revenue in 2016 increased 0.7 percent and saw a 3.6 percent increase in net income from the previous quarter. Fourth-quarter revenue was US$8.25 billion, increasing 32.3 percent year on year.

Its gross margin for the fourth quarter was 52.3 percent, operating margin was 41.9 percent and net profit margin was 38.2 percent.

Shipments of the 16/20-nanometer chip accounted for 33 percent of total wafer revenues in the quarter, whereas 28-nanometer shipments accounted for 24 percent. The company said the above “advanced technologies,” defined as 28-nanometer or more advanced, accounted for some 57 percent of revenue in the fourth quarter. Expected Profit Growth in 2017 The firm predicted this year profits would rise 5 to 10 percent compared to 2016. TSMC Chairman Morris Chang (張忠謀) said he predicted the global semiconductor market will see annual growth of around 4 percent in 2017, and 7 percent for the contract chip-manufacturing business. Chang also said he expected the first half of this year to see 10 percent growth compared with the same period last year, and a 5 percent growth increase in the second half.

The TSMC chief added that he expected smartphone shipments this year to rise 6 percent to 1.55 billion handsets. High-end smartphone shipments would rise 3 percent, mid-range smartphones increase 5 percent and low-end smartphone shipments increase 8 percent year on year, he said.

Global PC shipments, however, would drop around 7 percent and consumer electronics would fall 5 percent, he added.

Chang expressed optimism about the development of internet of things (IoT)-enabled devices, predicting shipments of them would increase by about 34 percent. Asked for his thoughts on the potential growth of the artificial intelligence (AI) market, Chang said he “saw a lot of opportunity” in AI applications in mobile, high-performance computing, the internet of things and automotives. “Progress made in artificial intelligence has created a level playing field, bringing in new players. This is where massive innovation can come from, so we are very excited,” TSMC President Mark Liu (劉德音) said. According to Liu, the company’s revenue mainly comes from mobile-related business, accounting for around 56 percent. High-performance computing generates 15 percent, PC-related products account for 10 and IoT and automotive products account for less than 10 percent.