Shulou(Shulou.com)05/31 Report--

The chip designs of TSMC, Huawei, Qualcomm and other companies are converted into chipsets used in iPhone 11 Pro Max, Huawei P40 Pro, Samsung Galaxy S20 Ultra 5G and other devices. The contract manufacturing company has just announced revenue of $10.31 billion in the first quarter of 2020 (including the three months from January to March) and a profit of $3.9 billion during the period. That exceeded some analysts' forecasts for a profit of $3.52 billion for the quarter.

Profits are also 90.8% higher than the bottom line the company reported for the same period last year. In the quarter, although revenue fell 2.1%, profits rose 0.8% in the first quarter. The net profit margin is 37.7% and the operating profit margin is 41.4%.

It is Apple's biggest TSMC customer, with Huawei accounting for 10 per cent of sales.

It is Apple's biggest TSMC customer, and research firm IDC predicts smartphone shipments will fall 2.3% to 1.3 billion this year. It seems that OEMs will have trouble keeping their mobile phone business profitable. In fact, the company's smartphone-related revenue fell 9% in the first quarter. In addition to mobile phone chips, TSMC also produces other products, including laptops.

TSMC's quarterly revenue depends on the global smartphone market.

With the exception of Apple, Chinese manufacturer Huawei accounts for a large portion of TSMC's annual revenue, which is believed to account for 10 per cent. According to foreign direct product rules, any product made in the United States, as long as it contains 25% or more of the original content of the United States, can be exported by the United States government.

However, the US has been talking about lowering the threshold to 10 per cent. By that time, almost all products made in the United States that contain any original American ingredients can be controlled by the United States government. This will be a huge problem for Huawei because it will not be able to buy the important chipsets needed to make mobile phones. Manufacturers have begun to shift cutting-edge chip production from low-end phones to SCIM, China's largest chipmaker. However, as SCIM lags behind TSMC by several process nodes, Huawei still needs to rely on Taiwan Province to produce 5nm Kirin 1012 for the upcoming Mate 40 series. The Mate 40 and Mate 40 Pro are expected to be released by the end of 2020 and will be Huawei's most technologically advanced phones of the year.

After releasing the first-quarter figures, TSMC cut its estimate for global smartphone sales this year and lowered its production and sales forecast for 2020. Wendell Huang, vice president and chief financial officer of TSMC, surprised some analysts by predicting that TSMC's revenue would be "flat" in the second quarter. In fact, TSMC said it was a very positive call because some analysts lowered their forecasts for the second quarter because of the pandemic.

TSMC is about to begin production of Apple's A14 Bionic chipset, which will be the first chipset for smartphones using smart nanotechnology nodes. Compared with 8.5 billion transistors in the A13 Bionic, this will make each chip contain 15 billion transistors. Compared with the A13 Bionic chipset, the A14 Bionic uses more transistors, which makes it more powerful and more energy efficient.

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Tag: TSMC smartphone.

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