TSMC’s first-quarter revenues miss guidance

By Christine Chou, The China Post

Taiwan Semiconductor Manufacturing Company (TSMC, 台積電), the world’s largest contract chipmaker, reported first-quarter profits lower than the company’s prior guidance, falling short by NT$6 billion due to a stronger-than-expected Taiwan dollar. TSMC posted Monday its first-quarter consolidated revenue of NT$233.91, which was lower than the firm’s target range of between NT$236 billion and NT$239 billion. The result represented a year-on-year gain of 14.9 percent and a 10.79 percent quarterly decline. The chipmaker said it predicted the New Taiwan dollar to U.S. dollar exchange rate would be NT$32 per US$1, compared to the current NT$31.16 per US$1. Instead of weakening by 0.7 percent, as TSMC had modeled, the average Taiwan dollar rate strengthened by almost 2 percent during the first quarter. This has been TSMC’s biggest miss in sales against analyst estimates since the financial crisis, reported Bloomberg. The consolidated revenue for March was NT$85.87 billion, a 20.2 percent month-over-month increase and a 17.5 percent year-on-year growth.

Much attention has been paid to TSMC’s shareholders meeting scheduled for Thursday, during which the company is expected to make explanations for its sagging profits, as well as announce any order fluctuations and development schedules for their advanced chip-making technology. Market analysts believe that although the second quarter is expected to see seasonally weak sales, the company is likely to generate more than NT$1 trillion in annual revenue. The Taiwan-based company makes chips on-spec for clients including Apple, Qualcomm, Nvidia Corp. and dozens more. The firm is reportedly the sole producer of the enhanced 10-nanometer wafers that are expected to power Apple’s upcoming and highly anticipated 10th anniversary iPhone. Optimistic on Smartphone Sales Announcing their 2017 business outlook in a shareholders meeting held earlier this year, TSMC Chairman Morris Chang (張忠謀) predicted the global semiconductor market would see annual growth of around 4 percent this year, and 7 percent for the contract chip-manufacturing business. The TSMC chief said he expected smartphone shipments this year to rise 6 percent to 1.55 billion handsets. High-end smartphone shipments are forecast to rise 3 percent, mid-range smartphones to increase 5 percent and low-end smartphone shipments to increase 8 percent year on year, he said. Global PC shipments, however, are expected to drop around 7 percent and consumer electronics to fall 5 percent, he added. 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, TSMC President Mark Liu (劉德音) previously said.