TSMC Posts Second Highest Revenues in November; UMC Revenues Hit Three-month High

14 Dec

World-leading wafer foundry TSMC unveiled its November revenues on December 9, 2016. Thanks to strong sales performance in the semiconductor industry during the off-season, TSMC reported consolidated revenues of NT$93.03 billion for November, up by 2.1% on month and 46.6% on year. The revenues hit the second highest monthly revenues. In the first 11 months of 2016, TSMC’s cumulative revenues rose 10.8% year on year, totaling NT$869.826 billion.

Driven by steady demand for Smartphone chips and the development of IoT products, TSMC has constantly posted record breaking revenues. According to TSMC’s forecast on the investor conference, TSMC’s fourth-quarter revenues are expected to fall between NT$255 billion and NT$258 billion, down by 0.9% to 2% from the third quarter. The company’s 2016 revenues are expected to grow 11% to 12% compared to 2015. Given that TSMC’s revenues have reached NT$184.115 billion in the first two months of the fourth quarter, the company only needs to earn NT$70.9 to NT$73.9 billion in December to meet its target.

Samsung, TSMC’s rival, announced the other day that it has begun mass production of chips based on its 10nm process node. Despite lagging behind in mass production schedule, TSMC has outpaced Samsung in the number of customers and orders for its 10nm technology which is slated for ramp-up in 2017.Hisilicon, MediaTek, and Apple are all TSMC’s customers. To compete with Qualcomm’s Snapdragon 830, MediaTek is planning to mass produce its first 10nm-based chip in the second quarter of 2017. There are even rumors that Qualcomm will switch orders for its future 7nm processors to TSMC. Therefore, investors have high hopes for TSMC’s future revenues. The company’s stock price closed at NT$186 on the TSE on December 9, 2016, up by NT$0.5.

Another wafer foundry UMC also announced its November revenues on December 9. The company registered revenues of NT$12.915 billion in November, up by 0.63% on month and 16.17% on year, reaching a three-month high. Its cumulative revenues from January to November 2016 grew 0.86% year on year to NT$135.312 billion. UMC’s stock price closed at NT$11.35 on the TSE on December 9, 2016, down by NT$0.05.

In the fourth quarter, the PC market is expected to do well, and demand for application ICs and baseband ICs will continue to rise. Therefore, UMC’s wafer shipment is expected to see 5% sequential growth in the fourth quarter, with a 5% decline in product ASP (Average Selling Price). Generally speaking, UMC’s fourth-quarter revenues are projected to remain flat sequentially.