Taiwan chipmaker TSMC enjoys record net profit

Oct 17, 2014

Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chip manufacturer, rode heavy demand from smartphone clients to a record net profit in the third quarter, handily beating market expectations.

Industry watchers said the company nabbed orders for the chips in the latest smartphones from Apple, which went on sale in September and are expected to be major contributors to TSMC's bottom line before the end of the year shopping season.

This helped the semiconductor firm earn net profit of NT$76.3 billion (HK$19.4 billion) in the third quarter of the year, compared with the NT$72.9 billion predicted by analysts.

It also helped the company notch a 26 per cent quarter-on-quarter rise in revenue from communication devices, even as computer-related revenue fell 6 per cent.

TSMC reported net profit of NT$59.7 billion in the second quarter of the year and NT$52 billion in the third quarter of last year.

Overall revenue of NT$209 billion in the third quarter also hit a record, eclipsing the NT$183 billion from the previous three months.

Analysts estimate that direct Apple orders contribute about 6 per cent of revenue for TSMC, which boasts more than twice the production capacity of main rival Samsung Electronics. This makes it an attractive choice for the Silicon Valley powerhouse, which also competes against Samsung in smartphones.

Qualcomm rival MediaTek, whose chipsets are popular among low-cost smartphone vendors in emerging markets such as the mainland, also counts TSMC as its main foundry partner, according to MediaTek chief financial officer David Ku.

Source: South China Morning Post