TSMC October sales fall by almost 12% from September

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, experienced an almost 12-percent drop in sales in October compared to the previous month, the company said Wednesday.

TSMC posted NT$134.54 billion (US$4.86 billion) in consolidated sales in October, down 11.9 percent from a month earlier, according to a statement from the company. The October figure was its lowest since July, when its revenue was NT$124.56 billion.

In addition to the traditional slow-season effect in the fourth quarter, analysts said the month-on-month decline reflected a relatively high comparison base in September, when the chipmaker saw its revenue top NT$150 billion for the first time to hit a new high of NT$152.69 billion, better than the market had anticipated.

On a year-on-year basis, however, TSMC's October consolidated sales rose 12.8 percent, the company's data showed.

In the first 10 months of this year, TSMC generated NT$1.28 trillion in consolidated sales, up 17 percent from a year earlier.

In an investor conference held in mid-October, TSMC said its sales for the fourth quarter are expected to range from US$15.4 billion to US$15.7 billion, with the median estimate of US$15.55 billion being 4.5 percent higher than that for the third quarter.

Based on the forecast, analysts said TSMC's sales growth momentum is expected to pick up in November and December, with the chipmaker's monthly revenue expected to rise to NT$148.3 billion and NT$152.5 billion as demand remains solid for chips made from its advanced 5-nanometer process, the latest technology for the company to start mass production.

In a tech forum held by National Cheng Kung University on Wednesday, Y.P. Chin (???), TSMC's senior vice president of operations, said a global chip supply shortage is expected to continue and chaos in the supply chain amid the COVID-19 pandemic is likely to exacerbate the situation.

TSMC will continue to expand its production with the pace expected to accelerate from 2021 to 2023, said Chin.

On Tuesday, TSMC detailed two massive investment plans in Japan and Kaohsiung as part of its global expansion.

In Japan, the chipmaker will establish a TSMC-majority-owned subsidiary by teaming up with Sony Semiconductor Solutions Corp. with an initial capital expenditure of about US$7 billion. Sony Semiconductor will spend about US$500 million for a stake of less than 20 percent in the new company, which will be located in Kumamoto.

The joint venture, called Japan Advanced Semiconductor Manufacturing (JASM), is scheduled to roll out specialty chips by the end of 2024, using TSMC's 22nm and 28nm processes.

Koichi Hagiuda, Japan's economy minister, told NHK on Wednesday that the Japanese government was very delighted to see TSMC invest in the country. He added that the Japanese government is considering providing financial assistance to the joint venture.

In Kaohsiung, TSMC will set up a wafer plant using its 7nm and 28nm processes. Construction of the Kaohsiung plant is scheduled to start in 2022 with mass production set to begin in 2024.

While TSMC did not disclose the financial terms for the new Kaohsiung plant, its board approved a capital budget of about US$9.036 billion on Tuesday. The chipmaker will assign part of the budget to the Kaohsiung production site.

As for the company's investment in research and development, Chin said TSMC has a talent pool of more than 20,000 R&D professionals and has spent more than NT$100 billion to maintain its lead over its competitors in high-end technology development.

In addition, Chin said, TSMC opened a semiconductor training center in July to train newly recruited engineers.

Source: Focus Taiwan News Channel