TSMC Forecasts 17% Sales Growth in 2020
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, has announced that 2020 will see its consolidated sales increase by 17% year-on-year.
During an investors conference, watched closely by the equity markets at home and abroad, TSMC’s chief executive officer, CC Wei, said that he predicts the company will benefit from higher demand this year for smartphones, high performance computer devices, automotive electronics, and the Internet of Things related applications.
TSMC expects that its advanced 7 nanometer process, the latest technology which the chipmaker has started mass producing, will continue to make a significant contribution to the company’s sales by accounting for over 30% of the total revenue in 2020.
Mass production of the company’s more sophisticated 5 nanometer process is scheduled for launch during the first half of 2020, which is expected to account for 10% of the total sales for 2020.
Wei commented that while the global pure foundry industry is expected to witness a 17% rise in sales throughout 2020, he projects that TSMC will perform better and exceed growth of the entire pure foundry industry by “several percentage points”.
He added that, excluding memory chip sales, the global semiconductor market is projected to achieve an 8% year-on-year rise in sales in 2020.
Before speaking at the event, TSMC released its earnings results which demonstrated that its net profit for 2019 Q4 was US$3.87 billion, the highest quarterly level in the business’ history, and a rise of 14.8% from the previous quarter, and up 16.1% from 2018.
The chipmaker commented that thanks to strong demand from 5G smartphones, the business is expected to see a migration in slow season effects during 2020 Q1, anticipating that its sales will drop by only 1.3% from the previous quarter.
To accommodate rising demand from clients, TSMC said that its capital expenditure will range between US$15 billion and US$16 billion, which is the highest it has ever been. The company will allocate 80% of its capital expenditure towards developing the 3 nanometer, 5 nanometer, and 7 nanometer technology, 10% will be allocated to advanced packaging and testing technology, and 10% towards spending in special process development.
It is anticipated that the 3 nanometer process is expected to start commercial production in 2020.