Sales generated by the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) in the third quarter rose more than 13 percent from a quarter earlier with analysts citing a weaker Taiwan dollar as one of the factors boosting revenue.

From July to September, TSMC posted NT$546.73 billion (US$17.07 billion) in consolidated sales, up 13.7 percent from a year earlier, according to sales data provided by the chipmaker.

At an investor conference held in mid-July, TSMC forecast that consolidated sales for the third quarter, a traditional peak season for the semiconductor industry, would range between US$16.7 billion and US$17.5 billion, up 6.5 percent to 11.6 percent from the second quarter. As TSMC made the estimate based on an exchange rate of NT$30.8 to US$1, the prediction translated into NT$514.36 billion to NT$539.0 billion in Taiwan dollar terms.

In Taiwan dollar terms, the chipmaker's third quarter consolidated sales beat the company's forecast and growth also exceeded the anticipated increase in U.S. dollar terms, on the back of a rising greenback amid fears over an aggressive Federal Reserve in terms of its rate hike cycle, analysts said.

At the end of September, the U.S. dollar closed at NT$32.268 against the Taiwan dollar, up 3.51 percent from the end of June.

In addition to the stronger greenback, analysts said TSMC also benefited from an increase in shipments of chips made on the 3 nanometer process, the most advanced technology used by the chipmaker in mass production since the end of 2022.

The strong demand for the 3nm process resulted from growing applications in artificial intelligence and the launch of the newest iPhone 15 series by Apple Inc., analysts said.

The new flagship iPhone 15 Pro and iPhone 15 Pro Max, unveiled in September, are powered by the latest A17 Pro GPU, the first Apple chip made using TSMC's 3nm technology. The new six-core GPU is about 20 percent faster than its predecessor, the A16 Bionic.

In September alone, TSMC's consolidated sales fell 4.4 percent from a month earlier and were also down 13.4 percent from a year earlier at NT$180.43 billion.

In the first nine months of this year, TSMC posted about NT$1.54 trillion in consolidated sales, down 6.2 percent from a year earlier due to the weakening global economy.

At the July investor conference, TSMC lowered its sales forecast for 2023, saying revenue would fall 10 percent from a year earlier in U.S. dollar terms, a downgrade from an earlier estimate of a 4-6 percent fall made in April.

According to TSMC, although demand for AI-related gadgets appeared solid, global economic weakness still weighed on the semiconductor industry.

It was the second time TSMC cut its sales forecast this year. In January, the chipmaker predicted "a slight increase" in sales in U.S. dollar terms for 2023.

TSMC has scheduled an investor conference for Oct. 19 to detail its third quarter results and give guidance for the fourth quarter as well as 2023 as a whole.

Meanwhile, United Microelectronics Corp. (UMC), a smaller contract chipmaker, said it posted NT$57.07 billion in consolidated sales in the third quarter, up 1.37 percent from the second quarter.

The market had previously expected UMC's third quarter sales to fall 1-2 percent, with shipments of chips made on its mature processes affected by weakening demand for consumer electronic devices.

The slight sequential increase in sales in the third quarter reflected the weaker Taiwan dollar, analysts said.

In September, UMC's consolidated sales rose 0.53 percent from a month earlier to NT$19.05 billion. However, the September figure fell 24.45 percent from a year earlier due to global demand weakness, analysts said.

UMC has tentatively scheduled an investor conference for Oct. 25.

By: DocMemory
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