TSMC pushes technology race, raises capex for 2020

January 16, 2020 // By Peter Clarke
TSMC pushes technology race, raises capex for 2020
Leading foundry chip manufacturer Taiwan Semiconductor Manufacturing Co. Ltd. has set a capital expenditure budget for 2020 at $15 to $16 billion on predictions for a strong 1Q20.

TSMC announced the capex alongside its financial results for 4Q19. The company announced consolidated revenue of NT$317.24 billion (about US$10.39 billion) and net income of NT$116.04 billion.

The company forecast 1Q20 sales revenue of between US$10.2 billion and US$10.3 billion. This would be a seasonal dip from the 4Q19 revenue. The first quarter of the year includes the Chinese New Year holiday and the short month of February, which slightly diminish sales potential.

But the 1Q20 would be up 44.4 percent on 1Q19 sales of $7.10 billion. The 1Q19 was a particularly weak quarter, a decrease of 16.1 percent year-over-year and 24.5 percent from the previous quarter.

In 4Q19, shipments of 7nm wafers accounted for 35 percent of total wafer revenue and 10nm process technology contributed 1 percent while 16nm accounted for 20 percent. Advanced technologies, defined as 16nm and more advanced technologies, accounted for 56 percent of total wafer revenue.

"Our fourth quarter business benefited from strong demand for high-end smartphones, initial 5G deployment and high performance computing related applications using TSMC's industry-leading 7nm technology," said Wendell Huang, CFO of TSMC, in a statement. "Moving into first quarter 2020, despite mobile product seasonality, we anticipate our business to be supported by the continued ramp of 5G smartphones."

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