TSMC Q3 sales surge to record amid jump in orders

Hong Kong

TAIWAN Semiconductor Manufacturing Co (TSMC) reported a stronger-than-expected 22 per cent rise in quarterly sales, buoyed by orders from its largest customers including Apple Inc.

The world's largest contract chipmaker saw revenue for the three months to September climb to a record NT$356.4 billion (S$16.9 billion), up from NT$293 billion a year earlier, showed Bloomberg calculations based on monthly sales data disclosed by TSMC. The average forecast of analysts was for NT$337.2 billion.

TSMC in July raised its 2020 outlook, saying that revenue this year will grow by more than 20 per cent in US dollar terms. Sales for the first nine months of the year suggest that Apple's main iPhone chipmaker is on track to meet its growth forecast as the Covid-19 pandemic fuelled demand for home computing equipment.

The company's business typically revs up in the months before Apple unveils new iPhones and the holiday season. It also likely received a boost during the quarter as its second-largest customer Huawei Technologies raced to stockpile supplies before a US ban on shipments to the Chinese telecommunications giant came into effect last month.

"Although TSMC can overcome the short-term hit of losing Huawei, the company would face a bigger problem if the US government continuously limits its ability to work with Chinese companies, which make up a quarter of its clients today and will continue to keep growing," said Dan Wang, technology analyst at research firm Gavekal Dragonomics.

TSMC shares have surged more than 80 per cent from their March lows amid signs that the company is bouncing back from thepandemic-induced disruptions. BLOOMBERG