Posted by alphaatlas 10:20 AM (CDT)
Tuesday March 12, 2019
The Taiwanese news outlet Digitimes seems to have many sources in the chipmaking industry, and according to their cited "market observers," Taiwain Semiconductor is expected to post their first annual profit drop in 8 years. For reference, both Nvidia and AMD manufacture their latest GPUs on TSMC's 12nm and 7nm processes, respectively, but the introduction of more 7nm products from both companies this year allegedly won't be enough to sustain growth. The report claims that "disappointing" sales of new iPhones and a "cutback in orders placed by GPU firm Nvidia" will more than offset a "ramp-up in orders for 7nm chips from HiSilicon, Qualcomm and AMD."
TSMC already described 2019 as "a slow year" for its operations and also the overall semiconductor market, citing macroeconomic uncertainty, and disappointing high-end smartphone sales that have led to inventory pile-ups in the supply chain. The use of substandard photoresist chemicals that disrupted its 12/16nm chip production at Fab 14B earlier this year is set to have a further impact on the foundry's performance this year. The photoresist material incident has prompted TSMC to cut its revenue estimate for the first quarter to NT$7-7.1 billion from NT$7.3-7.4 billion. The impact will also reduce TSMC's gross margin by 2.6pp, operating margin by 3.2pp, and EPS by NT$0.42, the foundry disclosed previously. TSMC said the wafers scrapped will be made up in the second quarter. But the incident is expected to reduce its gross margin by 0.2pp, operating margin by 0.2pp, and EPS by NT$0.08 in all of 2019.