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TSMC took a big MoM revenue hit. Any thoughts out there as to why? Could this be trend that will ripple throughout that fabless semiconductor industry? I will be in Taiwan again next week so let me know what questions I should ask.
Hsinchu, Taiwan, R.O.C. – May 10, 2017 - TSMC (TWSE: 2330, NYSE: TSM) today announced its net revenues for April 2017: On a consolidated basis, revenues for April 2017 were approximately NT$56.87 billion, a decrease of 33.8 percent from March 2017 and a decrease of 14.9 percent from April 2016. Revenues for January through April 2017 totaled NT$290.79 billion, an increase of 7.6 percent compared to the same period in 2016.
TSMC guided for an inventory correction this quarter, so it could just be that being realized. I wouldn't worry too much about it unless soft revenue numbers drag into Q3.
Don't worry about monthly or even quarterly fluctuations, normal in many businesses. I also feel they may be shifting to very sophisticated mem/sensor/energy sources SOCs. This will be a staggeringly huge market in the near future in everything from medical in many areas to IOT interacting with almost everything on top of their existing product lines. Large node, but very sophisticated SOCs combining many functions will be the future. Even if not real actively involved as he once was, I feel Morris Chang is a master strategist and set the stage for the future, like Howard Shultz of Starbucks. People felt both companies had maxed out, but were actually just entering a growth trajectory. Apple desperately wants to become a platform company and I can't imagine a better partnership than TSM/APPLE. Just as Morris said, TSM will leverage its IP across many nodes and there is a gold mine there. I see the same happening at AMAT with terrific results. It's about the whole range of nanotechnology and not just straight semis. Since TSM is AMATS bigger if not biggest customer this partnership will lead the nanotech revolution that is still in its infancy. I would appreciate your views on this after your visit.
PS I feel the InFO packaging is a critical piece in this, especially for anything on the body or implanted in it. Size, energy and performance are all critical and InFO packaging is part of the solution. It also allows a combination of mems/sensor/active devices on larger nodes to be combined with processing and communications functions all at their separate, optimum size. Whether in the body or on the body this will be an important factor. NFC to connect to a cell phone placed near the device could be used to connect to the device. Also a NFC device might be combined with a charger on devices near the skin. This medical technology could dramatically lower cost and also applied to livestock. All this would also apply to many IOT devices. The range of knowledge in numerous areas over a broad range of products TSM has would give them a significant advantage over the other players in this. Dan, I have no doubt this should give you an interesting starting point for many questions.
According to news report, TSMC doesn't change their Q2 forecast. That means May and June should see a significant revenue improvement. Interestingly TSMC's stock is up by NT$ 2.00 in the Taiwan Stock Exchange at this moment (15 minuets to market close).
Another fact is now TSMC's market capitalization (US$ 171.89B) is larger than Intel's (US$ 169.57B) at the closing of US market on May 10, 2017 (Yahoo Finance).
If we compare the "Trailing Twelve Months" revenue between TSMC (US$ 32.46B) and Intel (US$ 60.48B), their market capitalization indicated that investors are seeing two very different potential among TSMC and Intel.
In the S&P500, Apple, Microsoft, Amazon and Facebook are the first four most highly valued stocks in the index. Google is also in the top 10. In the Emerging Market MSCI index, it is Samsung, Tencent, TSMC, and Alibaba. Baidu is in the top 10.
TSMC, like Apple, is huge and important, but being huge, growth is constrained. They will grow about as fast as the overall economy permits. TSMC growth will approximate global growth. So the question becomes, is global growth slowing down after a brisk recovery from the lows of late 2015, and does TSMC provide a barometer of this growth? I would tend to say yes to both.
