Taiwan's TSMC lifts 2016
revenue forecast after third-quarter surge; analysts see
iPhone 7 boost
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[October 13, 2016]
By J.R. Wu
(Reuters) - Taiwan Semiconductor Manufacturing Co (TSMC) raised its
forecast for 2016 revenue after setting new profit and sales records in
the third quarter, as analysts said it was riding high on supplying
parts for Apple Inc's new iPhone 7.
The world's largest contract chipmaker's bullish forecast comes as
anticipation has intensified about how the iPhone 7, launched in early
September, has been selling in the wake of Samsung Electronics Co
scrapping its Galaxy Note 7 smartphone in what could be one of the
costliest product safety failures in tech history.
TSMC, which doesn't disclose details of customer orders, said on
Thursday it now expects revenue growth to be 11-12 percent, compared
with a previous estimate of a 5-10 percent increase. "Demand for
high-end smartphones will continue to improve," said co-Chief Executive
Officer Mark Liu, speaking at an earnings conference.
The upped guidance came after TSMC reported July-September net profit
climbed 28 percent to T$96.8 billion ($3.08 billion). That beat both the
T$95.2 billion mean forecast in a Thomson Reuters/Eikon survey of
analysts' forecasts and the previous quarterly record of T$80 billion.
Asked to comment on the potential industry impact of Samsung's woes,
TSMC officials said it was too early to tell how business will play out.
Guidance for the rest of the year didn't factor in any projections on
the scrapping of the iPhone rival smartphone, they said.
"Samsung is a very strong company," TSMC acting spokeswoman Elizabeth
Sun, told reporters at a briefing after the company met analysts. "I
think the issue today is that even they (Samsung) cannot say what has
caused this, so this makes everyone nervous."
TSMC's third-quarter revenue rose 23 percent to T$260.4 billion, another
quarterly record and also ahead of guidance the firm offered in July.
Last week TSMC said revenue for the first nine months of the year rose
7.1 percent to T$685.71 billion, jumping 39 percent in September, alone.
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A security personnel stands near the logo of Taiwan Semiconductor
Manufacturing Co. Ltd (TSMC) during an investor conference in
Taipei, July 16, 2014. REUTERS/Pichi Chuang/File Photo
According to Taiwan-based Fubon Research, TSMC is the sole source for the A10
processor used in the iPhone 7 and also the main foundry source for chips in the
Based on an estimated shipment of 82 million units of iPhone 7s in the second
half of this year, Fubon expects the iPhone 7 business to likely account for at
least 10 percent to 15 percent of TSMC's revenue in the second half of 2016.
For the fourth quarter, TSMC said it expects revenue to be between T$255 billion
and T$258 billion, just below the new record set in the July-September period.
"The previously anticipated inventory reduction at the end of Q4 will be mild,"
co-CEO Liu said during the earnings briefing. "The end of this year will be more
peaceful than in previous years. We see end-market demand is still healthy."
(Reporting by J.R. Wu; Editing by Kenneth Maxwell)
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