Tuesday, 04 August 2020

TSMC boasts impressive revenue as it bids goodbye to Huawei

by Harry Baldock, Total Telecom
Thursday 16 July 20

The Taiwanese chipmaker said it will no longer be doing business with Huawei after September 14th

Taiwan Semiconductor Manufacturing Company (TSMC) is of the largest chip manufactures in the world, playing a critical role in building silicon equipment not only for mobile phones but also computers. It is Apple’s primary chipmaker for the iPhone and does considerable business around the world…

Taiwan Semiconductor Manufacturing Company (TSMC) is of the largest chip manufactures in the world, playing a critical role in building silicon equipment not only for mobile phones but also computers. It is Apple’s primary chipmaker for the iPhone and does considerable business around the world, including being a staple of Huawei’s semiconductor supply chain.
 
However, US sanctions have dealt a blow to the latter’s relationship, with TSMC now confirming that they will be ending their dealings with Huawei by the 14th of September. The company ceased taking new orders from Huawei back in May and just last month said it was confident that other companies could “fill the gap” if the US ban came into effect. 
 
This news comes alongside the latest financial update from the company, which has shocked analysts by posting impressive revenue. With the tumultuous geopolitical situation and the disruption caused by the pandemic, analysts were expecting something of a depressed financial report, but the company in fact raised its outlook, projecting a more than 20% growth in sales.
 
“Moving into third quarter 2020, we expect our business to be supported by strong demand for our industry-leading 5nm and 7nm technologies, driven by 5G smartphones, HPC and IoT-related applications,” said TSMC’s CFO Wendell Huang.
 
Part of this prediction is surely tied to the launch of Apple’s 5G device, expected to take place in the coming months. Apple accounted for almost a quarter of TSMC’s revenue in 2019. The loss of Huawei will be significant for TSMC, but it is small fry compared to the amount of business it does with the American company. 
 
In fact, TSMC may be strengthening its relationship with the US, confirming that it will be constructing a new plant in Arizona over the next year. Estimated to cost $12 billion, the new facility is set to be built in 2021, with production to begin three years later.
 
 
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