iPhone X expected to drive record fall earnings at TSMC

The sole mobile applications chipmaker for Apple’s iPhones and iPads, Taiwan Semiconductor Manufacturing Company, is forecasting revenue growth to record levels thanks in part to demand for the iPhone X.

It reported earnings metrics for the third calendar that landed in the top area of its estimates range: gross of NT$252.11 billion (US$8.31 billion) with net income at NT$89.93 billion (US$2.98 billion). Gross margin was just shy of 50 percent. Still, these cash numbers are 3 percent and 7 percent down from the year prior, respectively.

The company made the majority of its money off of 28nm chips with only 34 percent dedicated to the more advanced 10nm, 16nm and 20nm wafers — many of the latter group are featured in the past several iPhones. Cryptocurrency mining was seen as one of the strong draws, but analysts are pointing to weaker demand for the iPhone 8 as the main drag.

The company predicted revenue for the fourth quarter to top out at US$9.2 billion — 10 percent better than the quarter past and 11 percent better than a year before. As the supply chain picture isn’t looking too good for the iPhone X, if customers are willing to wait many weeks or even months for a device, these numbers may still hold up.

Furthermore, TSMC is forecasting annual growth to range between 5 and 10 percent for the next few years, Reuters reports. It’s accelerating development of its 7nm fabrication with a US$10.8 billion capital expenditure set for 2018. This is despite stiffening competition from other foundries at Samsung and many Chinese firms.

“In terms of a lot of fabs in mainland China, we don’t like it, but we are very competitive. We’ll continue to compete of course and maintain our market share,” said CEO C.C. Wei.

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Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.