Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract semiconductor maker, trimmed its 2020 earnings forecast to account for an expected drop in demand from the mobile device sector caused by Covid-19 (coronavirus).
The company cut revenue growth forecasts from 20 per cent previously to a mid- to high-teens level. In a statement, CFO Wendell Huang said it expects Q2 revenue to be “flattish”, as weaker mobile product demand is balanced by continued 5G and high-performance computing (HPC) product launches.
It tipped revenue in the current quarter to come in at between TWD303 billion ($10.1 billion) to TWD312 billion.
Opening quarter
Net income in Q1 jumped 90.6 per cent year-on-year to TWD117 billion, with consolidated revenue up 42 per cent to TWD310.6 billion.
Huang said first quarter growth was driven by HPC-related demand and 5G smartphones. The smartphone sector accounted for 49 per cent of revenue in the quarter, up from 47 per cent in Q1 2019.
TSMC, which also makes chips for Huawei’s HiSilicon unit, more than doubled capex to TWD193 billion.
In an earnings call, the company said its fabrication facilities had not been impacted by measures to contain the spread of Covid-19 and while it experienced some short delays in the delivery of materials, its supply chain was not disrupted.
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