TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co Ltd (TSMC) reported a 13.5% rise in third quarter profit on Thursday, its strongest growth since 2017, as robust demand for 5G chips boosted sales despite fears of a global tech slowdown.
The logo of Taiwan Semiconductor Manufacturing Company (TSMC) is seen during an investors’ conference in Taipei, Taiwan April 13, 2017. REUTERS/Tyrone Siu
The world’s largest contract chipmaker has shrugged off those concerns stemming from a protracted U.S.-China trade war, as TSMC’s high-performance chips are in demand for smartphones and fifth-generation telecommunications (5G) technology.
TSMC, whose clients include Apple, Qualcomm Inc and Huawei, said July-September profit was T$101.07 billion ($3.30 billion).
That compared with a T$96.33 billion average forecast drawn from 20 analysts, according to Refinitiv data.
Revenue rose 10.7% to $9.4 billion, compared with the company’s own estimate of $9.1 billion to $9.2 billion.
New smartphone launches ahead of the year-end shopping season, as well as rising demand for new technologies such as 5G and artificial intelligence, will continue to drive sales for TSMC’s high-performance chips, known as 7nm, analysts said.
“The strength also supports our view that 5G will propel TSMC to a faster growth trajectory due to its need for leading edge process technology,” Sanford C. Bernstein analyst Mark Li wrote in a note prior to the earnings announcement.
Smartphone makers including Samsung Electronics Co Ltd and Huawei are racing to develop phones enabled with the 5G technology, which could be up to 100 times faster than current 4G networks.
Li said strong demand from smartphone makers including Apple and Huawei’s HiSilicon could sustain the growth into the fourth quarter.
TSMC shares have risen 28% so far this year.
Reporting By Yimou Lee; editing by Jane Wardell and Darren Schuettler
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