Taiwan Semiconductor Manufacturing Co Ltd (TSMC) reported a 13.5% rise in third quarter profit on Thursday, as a result of robust demand for 7nm chips for premium smartphones and high performance computing applications.
TSMC announced consolidated revenue of NT$293.05 billion, net income of NT$101.07 billion, and diluted earnings per share of NT$3.90 (US$0.62 per ADR unit) for the third quarter ended September 30, 2019.
Year-over-year, third quarter revenue increased 12.6% while net income and diluted EPS both increased 13.5%. Compared to second quarter 2019, third quarter results represented a 21.6% increase in revenue and a 51.4% increase in net income.
In US dollars, third quarter revenue was $9.40 billion, which increased 10.7% year-over-year and increased 21.3% from the previous quarter.
Gross margin for the quarter was 47.6%, operating margin was 36.8%, and net profit margin was 34.5%.
In the third quarter, shipments of 7-nanometer accounted for 27% of total wafer revenue and 10-nanometer process technology contributed 2% while 16-nanometer accounted for 22%. Advanced technologies, defined as 16-nanometer and more advanced technologies, accounted for 51% of total wafer revenue.
By platform, revenue from Smartphone, HPC, IoT, and Automotive increased 33%, 10%, 35% and 20% respectively, while DCE decreased 1% and Others remained flat from the second quarter. From a geographic perspective, revenue from TSMC's customers based in North America accounted for 60% of total net revenue, while revenue from Asia Pacific, China, EMEA (Europe, Middle East, and Africa) and Japan accounted for 9%,20%,6%, and 5% of total net revenue respectively.
“Our third quarter business benefited from new product launches both in premium smartphones and high performance computing applications using TSMC’s industry-leading 7-nanometer technology,” said Wendell Huang, VP and Chief Financial Officer of TSMC. “We expect the strength of demand for our 7-nanometer technology will continue, driven by high-end smartphones, initial 5G deployment and HPC-related applications. Based on our current business outlook, management expects the overall performance for fourth quarter 2019 to be as follows”:
- Revenue is expected to be between US$10.2 billion and US$10.3 billion;
- Gross profit margin is expected to be between 48% and 50%;
- Operating profit margin is expected to be between 37% and 39%