TSMC's new chips hint at life after Apple

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Apr. 19, 2018 – 

TSMC's latest results offer a glimpse of the company's life after Apple. The world's largest contract chipmaker on Thursday said sales in the three months ended March topped T$248 billion, or $8.5 billion, missing analyst estimates. The good news is the $210 billion giant is on track to debut cutting-edge new semiconductors this year.

Weak smartphone sales and fizzling demand for special chips used for crypto-currency mining clearly weighed on performance. Analysts at Morgan Stanley estimate Apple, TSMC's most important customer, sold just 52 million iPhones in the first three months of 2018 – down by more than a third from the previous quarter. At the same time bitcoin prices have cratered, down 43 percent this year, dampening sales of semiconductors used to mine the digital token. TSMC now expects full-year revenue growth to be close to 10 percent, compared to a previous forecast of 10 to 15 percent.

Even so, this lacklustre quarter may prove to be a blip, if an ugly one. In the pipeline are the company's so-called 7nm generation of semiconductors. These new chips, TSMC's most advanced yet, are already under production and will hit the market soon. Packing more transistors, the company says 7nm will be 20 percent faster than the last generation, and much more efficient. That should help fend off rival Samsung Electronics. South Korea's $320 billion tech behemoth plans to roll out an even more advanced version of 7nm later this year.

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