No more Chips for Huawei

Nevertheless, TSMC invests at Record Level

17. Juli 2020, 10:59 Uhr   |  Heinz Arnold

Nevertheless, TSMC invests at Record Level

TSMC is expecting an increase in sales of more than 20 percent for the third quarter and intends to invest a record sum - despite the delivery stop to Huawei from this September.

If TSMC is going to invest between 15 and 16 billion dollars this year, it is expected to invest as much as 17 billion dollars next year - although the company will no longer supply chips to Huawei or its design subsidiary HiSilicon from September this year, thus losing its second largest customer. In May, the US had tightened its export restrictions once again to prevent companies from supplying Huawei with chips made on equipment from US manufacturers. Nevertheless, despite all the adversities caused by the trade war and corona pandemic, TSMC expects a 20 percent jump in sales next year.  

For the third quarter, TSMC is forecasting sales of between 11.2 and 11.5 billion dollars - a jump of at least 20.7 percent compared with the same quarter of the previous year.

In the second quarter, revenue was $10.38 billion, which represents growth of 28.9 percent compared with the second quarter of 2019.

It is not due to the smartphone market as a whole that TSMC is so optimistic about the future. The company expects this market to shrink by over 10 percent in 2020. However, according to Vice Chairman C.C. Wei, 5G smartphones would achieve high penetration in the double-digit percentage range as early as 2020. This will benefit TSMC's largest customer - Apple. But chips from other major customers, including Analog Devices, Broadcom, MediaTek, Nvidia and NXP, should also benefit from a growing market. Only recently, analysts at IC-Insights predicted that the semiconductor market as a whole would grow by 3 percent in the coming year.

The fact that TSMC was able to further increase its sales is mainly due to the fact that the company also manufactures the chips that are migrating to the 5G infrastructure. China is building its network at high speed and many other countries around the world are also working flat out to drive their 5G infrastructures forward. This is because a 5G infrastructure is not only considered a prerequisite for the development of a high-performance telecommunications network, but also for many other critical sectors such as autonomous driving, IoT, Industry 4.0, medical technology and energy supply. In addition, demand for chips for servers and home office equipment has increased due to the corona pandemic, which has also boosted TSMC's business.

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TSMC Europe B.V., Huawei Technologies Deutschland GmbH