After the settlement of the dispute between Apple and Qualcomm, the global smartphone market is upbeat about 5G adoption.
TSMC, the world’s biggest contract chipmaker, believes that settlement between Apple and Qualcomm (both are TSMC clients) will undoubtedly help the Taiwanese company.
TSMC to Benefit from Settlement of Dispute Between Apple & Qualcomm
Speaking to the reporters on Thursday, TSMC senior director Elizabeth Sun said, “The settlement will bring forward 5G adoption; this will definitely benefit TSMC.”
The chipmaker is positive about faster 5G mobile network, and this would lift the demand. However, TSMC has seen steep quarterly profit drop since 2011.
About the steady demand, Lora Ho, CFO of TSMC said, “While the economic factor and mobile product seasonality are still lingering as we move into the second quarter, we believe we may have passed the bottom of the cycle of our business as we are seeing demand stabilizing.”
TSMC boasts high-profile clients in its kitty; the likes of Apple, Qualcomm and Huawei Technologies buy chips from TSMC. But the chipmaker registered a 32% decline in its net profit to $2 billion for January-March.
This is the steepest drop since the third quarter of 2011. Supply chain manufacturers of Taiwan are hit by declining demand for smartphones globally, and US-China trade war.
Elizabeth Sun added that a defective chemical hampered the production in February, and this affected its first-quarter revenue.
This forecast has provided some relief to investors as they are apprehensive about global tech slowdown especially after Samsung Electronics posted weak demand.
Industry pundits believe that TSMC would come out of this slump gradually in the next few months as new demands for 5G equipped devices can keep TSMC’s full-year revenue stable.
In his research note, Mark Li, an analyst at Sanford C. Bernstein, wrote, “Fortunately 5G should put TSMC back to growth and help it deliver double-digit earnings per share expansion in 2020 and 2021.”
That’s all folks!
According to industry insiders, shaky Sino-US trade negotiations will certainly help TSMC as Chinese customers might stock up semiconductor products.
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