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Pandemic? What Pandemic? Taiwanese Semiconductor Foundry’s Earnings Suggest Roaring Demand

Boom time at TSMC

By CBR Staff Writer

Analysts may be predicting pandemic-induced recession of varying degrees of depth in coming months, but one business has been doing roaring trade.

The latest figures from Taiwan’s TSMC — the world’s largest dedicated independent semiconductor foundry — show that revenues were up 21.5 percent month-on-month and a huge 42.4 percent in March, compared to March 2019.

TSMC makes computer chips for most of the high profile semiconductor providers; everyone from Apple to Broadcom, via AMD and NVIDIA. The surge may have been driven in part by judicious stockpiling among chipmakers concerned about future supply chain disruption resulting from the pandemic’s impact.

Its revenues for the month were NT$113.52 billion (£2.96 billion), the company said, adding that revenues for January through March 2020 were up 42.0 percent compared to the same period in 2019; startling growth amid a recession.

Inside one of TSMC’s fabs. Credit: TSMC

The report came as research house Gartner predicted that 2020 global semiconductor revenue would hit $415.4 billion in total; down $55 billion from last quarter’s forecast.

““Non-memory semiconductor markets will experience a significant reduction in smartphone, automobile and consumer electronics production and be heavily impacted across the board,” said Richard Gordon, research practice VP at Gartner.

He added: “In contrast, the hyperscale data centre and communications infrastructure sectors will prove more resilient with continued strategic investment required to support increased remote working and online access.”

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As TSMC’s earnings show, many are betting on the economy bouncing back later this year.

Gartner meanwhile notes that memory continues to be a bright spot, with revenues forecast to grow 13.9 percent in 2020: “NAND flash supply will remain historically low in 2020 due to fab delays and technology transitions, but the demand will diminish later in 2020,” said Gordon.

“Initial price increases of 15.7 percent during the first half of 2020 will reverse to a 9.4 percent decline during the second half of the year. However, average pricing levels will still enable NAND flash revenue to achieve growth this year.”

On Monday April 13 (days after it was reported that TSMC had lost a significant order from Huawei) Apple is reported by local press to have bought up all of its production capacity, for what is believed to be the “iPhone 12.”

According to the China Taiwan Economic Daily, Apple has asked TSMC to produce almost 10,000 more processors on its 5nm node in Q4.

Read this: “A Sweetheart Deal, Done in Secret”: Intel and Micron Sued Over 3D XPoint

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