Taipei-Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, reported on Thursday record high quarterly net profit for the fourth quarter of last year on the back of strong demand for smartphones and high performance computing devices.
At an investor conference watched closely by equity markets at home and abroad, TSMC said net profit for the October-December period was NT$116.04 billion (US$3.88 billion), the highest quarterly level in the company's history, up 14.8 percent from a quarter earlier and also up 16.1 percent from a year earlier.
TSMC's fourth quarter earnings per share (EPS) stood at NT$4.47, compared with NT$3.90 in the third quarter and NT$3.86 recorded over the same period of the previous year, the company said.
The fourth quarter results came after the local equity market closed. On Thursday, TSMC shares fell 1.62 percent to end the day at NT$334.50 with 55.13 million shares changing hands on the Taiwan Stock Exchange amid fears that Washington will increase business sanctions against Chinese telecom equipment giant Huawei Technologies Inc. Huawei is one of TSMC's largest clients.
TSMC's record high net profit had been widely expected after the chipmaker posted a new high of NT$317.24 billion in consolidated sales for the fourth quarter, up 8.3 percent from the previous quarter and also up 9.5 percent from a year earlier.
The company said chips made using its advanced 7 nanometer process, the latest technology TSMC has moved into mass production accounted for 35 percent of total sales in the fourth quarter, up from 27 percent in the third quarter.
Chips made on its 10nm process made up about 1 percent of total sales in the fourth quarter, compared with 2 percent in the third quarter, while chips made on its 16nm process represented 20 percent of total sales, down from 22 percent in the previous quarter.
TSMC is scheduled to launch mass production of the more sophisticated 5nm process later this year.
In the fourth quarter, TSMC said, the company benefited from improving production capacity utilization, its gross margin -- the difference between revenue and cost of goods sold -- rising from 47.6 percent in the third quarter to 50.2 percent. The fourth quarter figure also beat the company's earlier estimate ranging from 48-50 percent.
TSMC's operating margin -- the difference between sales, the cost of goods sold and operating expenses -- for the fourth quarter also rose from 36.8 percent in the third quarter to 39.2 percent in the fourth quarter.
For 2019, TSMC's net profit stood at NT$345.26 billion, down 1.7 percent from a year earlier, with EPS at NT$13.32, compared with NT$13.54 a year earlier, while consolidated sales rose 3.7 percent from a year earlier to NT$1.07 trillion.
Source: Focus Taiwan News Channel