TSMC Reports Record Q2 Profits on Demand for Faster Chips

TSMC is losing Huawei Technologies as a customer after the US slapped the Chinese company with sales restrictions.

Advertisement
By Reuters | Updated: 16 July 2020 14:00 IST
Highlights
  • TSMC reported April-June net profit of TWD 120.8 billion
  • Revenue for the quarter climbed 34.1 percent to $10.38 billion
  • TSMC shares have risen about 10 percent this year
TSMC Reports Record Q2 Profits on Demand for Faster Chips

TSMC is losing Huawei Technologies as a customer due to US restrictions

Taiwan Semiconductor Manufacturing Co (TSMC) said quarterly net profit surged 81 percent to a record level and predicted hefty revenue gains for the third-quarter on robust orders for advanced chips.

High-performance chips used in 5G telecommunications and other new technologies have been in strong demand, particularly as more people work from home and companies scramble to add more bandwidth amid the coronavirus pandemic.

The world's largest contract chipmaker estimated third-quarter revenue could climb as much 22 percent from a year earlier to $11.5 billion (roughly Rs. 86,428), a forecast that comes despite losing Huawei Technologies as a customer after the United States slapped a ban on selling to the Chinese company.

"We expect our business to be supported by strong demand for our industry-leading 5 nanometre and 7 nanometre technologies, driven by 5G smartphones, high-performance computing and IoT-related applications," Chief Financial Officer Wendell Huang told a briefing.

Advertisement

April-June net profit came in at TWD 120.8 billion (roughly Rs. 30,833 crores), 8 percent ahead of market expectations, while revenue for the quarter climbed 34.1 percent to $10.4 billion (roughly Rs. 78,210 crores).

Underscoring its bullish outlook, it lifted capital spending plans for this year to $16-$17 billion (roughly Rs. 1.20 lakh crores - roughly Rs. 1.27 lakh crores) from a prior estimate of $15-$16 billion (roughly Rs. 1.12 lakh crores - roughly Rs. 1.20 lakh crores). It spent $14.9 billion (roughly Rs. 1.12 lakh crores) in 2019.

Advertisement

TSMC, which counts Apple and Qualcomm among its customers, said it has made decent progress in filling up capacity since the loss of Huawei orders. It stopped taking new orders from the Chinese telecommunications and smartphone giant in May and does not plan to ship wafers after September 15.

TSMC unveiled plans for a $12 billion (roughly Rs 90,225) plant in Arizona in May, a move widely seen as currying favour with the United States as Washington spars with over Beijing over trade and Huawei.

Advertisement

The plant will make advanced 5 nanometre chips and is due to start operating in 2024, targeting production of 20,000 wafers per month, the company said on Thursday.

TSMC also said it expects the global market for contract chip manufacturing to show mid- to high-teens percentage growth this year, up from a previous forecast of a high single-digit to low teens percentage growth.

TSMC shares have risen about 10 percent this year, giving it a market value of $320 billion (roughly Rs. 24.06 lakh crores), overtaking US rival Intel which now has a market value of $249 billion (roughly Rs. 18.72 lakh crores).

© Thomson Reuters 2020


Why are smartphone prices rising in India? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.

Affiliate links may be automatically generated - see our ethics statement for details.
 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: TSMC, Huawei, Semiconductors
Advertisement

Related Stories

Popular Mobile Brands
  1. Redmi Note 15 Pro+, iQOO Z10 Specifications Tipped Ahead of Debut
  2. Asus Vivobook 14 Launched in India With 14-Inch Screen, Snapdragon X Chip
  3. Vodafone Idea (Vi) Gives Extra Benefits With These Prepaid Plans: Report
  4. Vivo Y50m 5G, Vivo Y50 5G With 6,000mAh Battery Launched: All Details
  5. Akai Soul Series Soundbars With Up to 160W Output Launched in India
  6. Redmi Turbo 5 Launch and Specifications Tipped: All Details
  7. OnePlus Could Unveil a Compact Flagship Tablet Alongside the OnePlus 15T
  8. Samsung Galaxy Z Fold 8 May Not Feature This Part From the Galaxy Z Fold 7
  9. Lava Blaze Dragon India Price Range Tipped, Chipset Details Confirmed
  1. Algae-Grown Bioplastic Passes Mars Pressure Test, Boosting Hopes for Red Planet Habitats
  2. NASA Tests Modular Satellite Tech to Cut Launch Costs and Speed Missions
  3. NASA’s Twin TRACERS Satellites Will Monitor Space Weather to Shield Earth from Solar Storms
  4. Samsung Galaxy Z Fold 8 Might Not Feature Upgraded Titanium Backplate Included With Galaxy Z Fold 7: Report
  5. Samsung Galaxy Tab A11 LTE Version Reportedly Surfaces on FCC, IMEI Certification Websites
  6. Asus Vivobook 14 Launched in India With Snapdragon X Processor, 14-Inch LCD Screen: Price, Specifications
  7. Meta Says It Won't Sign EU’s GPAI Code of Practice Due to ‘Legal Uncertainties’
  8. OnePlus Teases Launch of New Tablet in India on July 23; OnePlus Pad Lite Expected to Debut
  9. Redmi Note 15 Pro+, iQOO Z10 Tipped to Feature Snapdragon Chipsets, 1.5K Resolution Displays
  10. Ubisoft's Upcoming Launches Include a New Ghost Recon Game, CEO Says
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.