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TSMC Delivers Record Profit

July 14, 2022

TSMC reported consolidated revenue of NT$534.14 billion, net income of NT$237.03 billion, and diluted earnings per share of NT$9.14 (US$1.55 per ADR unit) for the second quarter ended June 30, 2022.

Investors were looking for NT$ 524.02 billion in revenue. Net income also came in ahead of estimates..
Year-over-year, second quarter revenue increased 43.5% while net income and diluted EPS both increased 76.4%. Compared to first quarter 2022, second quarter results represented an 8.8% increase in revenue and a 16.9% increase in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, second quarter revenue was $18.16 billion, which increased 36.6% year-over-year and increased 3.4% from the previous quarter.

Gross margin for the quarter was 59.1%, operating margin was 49.1%, and net profit margin was 44.4%.

In the second quarter, shipments of 5-nanometer accounted for 21% of total wafer revenue; 7- nanometer accounted for 30%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 51% of total wafer revenue.

The Semiconductor Industry Association reported that semiconductor industry sales were $51.8 billion in the month of May 2022, an increase of 18.0% over the May 2021 total of $43.9 billion and 1.8% more than the April 2022 total of $50.9 billion. Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. SIA represents 99% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.

“Global demand for semiconductors remained high in May, with year-to-year sales increasing strongly across all major regional markets and product categories,” said John Neuffer, SIA president and CEO. “Continuing high demand for semiconductors will necessitate more chip research, design, and manufacturing in the years ahead. We urge leaders in Washington to swiftly enact bipartisan innovation and competitiveness legislation that ensures a large share of this chip production and innovation occurs on U.S. soil. The clock is ticking.”

Sales were up compared to April 2021 in the Americas (36.9%), Japan (19.8%), Europe (16.1%), Asia Pacific/All Other (15.8%), and China (9.1%). Month-to-month sales increased in Japan (3.9%), the Americas (2.9%), China (1.7%), and Asia Pacific/All Other (1.1%), but fell slightly in Europe (-0.7%).

In 2021, approximately 95% of the top 20 publicly traded semiconductor companies by revenue reported more than a 22% year-on-year (YoY) growth in revenue. This comes despite supply chain issues, disruptions in the logistic network and a greater demand for technology, finds GlobalData, a leading data and analytics company.

Divya Vootkuru, Company Profiles Analyst at GlobalData, comments: “All of the top 20 semiconductor companies reported positive YoY revenue growth in 2021, with 20% including Qualcomm, NVIDIA, MediaTek and Advanced Micro Devices registering a revenue growth of over 50%.”

A significant increase in customer demand for electronic products and making prepayment arrangements in supply chain networks resulted in major semiconductor companies expanding their business operations. According to research by GlobalData, the semiconductor industry was valued at $500 billion in 2021* and is expected to grow at a compound annual growth rate (CAGR) of 7% between 2021–2025.

Vootkuru adds: “However, a delay in product delivery to customers or cancellations due to disruptions could have had a material adverse effect on business operations. To avoid this, semiconductor companies started implementing sustainable supply chain initiatives. These included long term purchase commitments, prepayment arrangement with suppliers and additional capacity arrangements. Long term contracts with suppliers and an increase in manufacturing facilities will help semiconductor companies to reduce delays and product cancellation issues.”

Advanced Micro Devices (AMD)

AMD registered a 68% YoY revenue growth due to the launches of AMD Radeon graphic, AMD Instinct, MI200, AMD Ryzen mobile processor and EPYC server processors and an increase in its computing and graphics and enterprise, embedded and semi-custom product sales.

NVIDIA

Higher sales from GeForce GPUs and demand for NVIDIA’s Ampere architecture products resulted in its gaming segment growing by 61%. NVIDIA Ampere architecture GPUs sales also had a 58% increase in data center revenue. Both of these helped NVIDIA to register a 61% YoY growth in revenue.

Qualcomm and Mediatek

An increase in demand for 5G products across handsets, radio frequency front-end (RFFE) and 5G system in chip (SoC) resulted in Qualcomm and Mediatek improving their financial performance. The launch of 5G multimode SoC and the acceleration of 5G migration resulted in Mediatek achieving a revenue growth of 62% and a 187% increase in net earnings. Commercial deployments of 5G networks assisted Qualcomm in achieving a 50% growth in revenue and 74% of YoY net income growth.

ON Semiconductor

ON Semiconductor reported a revenue growth of 28% driven by higher demand for PSG, ASG and ISG semiconductor products. The company also had a net income growth of 331% which was attributed to Onsemi sales.

NXP Semiconductor

Among the top 20 semiconductor companies, NXP Semiconductor registered very high net earnings due to adjustments to reconciling its net income of $1.6 billion and $0.4 billion from operating assets and liabilities.

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