TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co Ltd (TSMC) hiked its revenue outlook again this year after logging record quarterly profit, noting the coronavirus pandemic was driving demand for advanced chips.
The chip sector has been one of the rare industries benefiting from the virus with more people investing in premium devices as they spend longer hours at home and as corporations seek to add more bandwidth for remote workers.
TSMC, the world’s largest contract chipmaker said it now expects 2020 revenue to jump more than 30%, up from an earlier forecast of more than 20%.
It predicted fourth-quarter revenue of between $12.4 billion and $12.7 billion, compared with $10.4 billion booked in the same quarter a year ago.
“COVID has accelerated the digital transformation,” Chief Executive C.C. Wei told an online earnings briefing, adding that robust demand for smartphones and other electronics as well as 5G technologies had spurred orders for high-end chips.
In July-September net profit surged 36% to a record T$137.3 billion ($4.8 billion), well ahead of the T$124.9 billion average of 19 analyst estimates compiled by Refinitiv.
Revenue for the quarter also handily beat the company’s own estimates, climbing 29.2% to $12.1 billion.
TSMC’s advanced chips are used in high-end smartphones such as Apple’s newly unveiled 5G iPhone 12 as well as in telecommunications technology and artificial intelligence.
That has helped TSMC offset a loss of orders from Huawei after the US imposed extensive restrictions on sales to the Chinese telecommunications giant.
A US proposal to also put Semiconductor Manufacturing International Corp (SMIC) on the same trade blacklist has also caused some of the Chinese chipmaker’s clients to preemptively switch over to its Taiwanese rival, analysts have said.
Shares of TSMC have jumped about 36% so far this year, giving it a market value of $414 billion.
($1 = 28.7260 Taiwan dollars)
(Reporting by Yimou Lee and Ben Blanchard; Editing by Edwina Gibbs)