Solid Performance of Apple Chip Supplier reflects resilience in Trade Fight

The current-quarter revenue of Taiwan Semiconductor Manufacturing Co. broke the scale of analysts’ expectations, as the Apple Inc. supplier signals off a smartphone drop and United States’ sanctions on Huawei Technologies Co. to ride demand for leading-edge chips.

The largest contract chip-manufacturer of the world anticipates sales of around $9.1bn to $9.2bn in the coming quarter, ahead of average expectations for around $8.9 bn. The Taiwanese firm earlier reported a drop in June-quarter net income to NT$66.8Bn which is equivalent to $2.1 billion, exceeding the NT$65.7bn estimated.

Taiwan Semiconductor Manufacturing Co.’s solid outlook might put the fear of a continuing global chip downturn on rest as Washington & Beijing clash. Its leading-edge in chipmaking might help it grab an enormous portion of demand for cutting-edge high-performance semiconductors, especially as countries roll out ultra-fast 5th generation wireless networks. Taiwan Semiconductor Manufacturing Co.’s business is on stake and should begin to rebound, C. C. Wei, The Chief Executive Officer of TSMC stated.

He told the reporter in Taipei Thursday that they have passed the bottom of the cycles of their business, and they should see an increase in the demand.  He added that they see very, very strong demand in the second half of 2019.

It is expected that orders for crypto-mining gear will help TSMC’s 3rd-quarter sales, according to Morgan Stanley, which most recently raised its target price on the stock by 9 percent. The typical year-end up-gradation of iPhone manufacturing & a new chip-product cycle from Advanced Micro Devices Inc. could also reach to the top line.

Charles Shum, Bloomberg Intelligence stated that the guidance reflected that management is confident on the rebound of demand in 2H, perhaps boosted by new orders from Advanced Micro Devices. And, we are expecting the gross margin can return to 50 percent by the 4th quarter.