Apple silicon was key to TSMC's November surge

From Arjun Kharpal's "TSMC bucks broader chip slump with 50% revenue surge, helped by Apple iPhone orders" posted Friday on CNBC:

TSMC, the world’s largest contract chipmaker, on Friday reported a surge in revenue in November thanks in part to orders of semiconductors for high-end smartphones such as Apple’s iPhone...

TSMC makes chips for a wide array of companies, including the latest semiconductors for Apple and Qualcomm as well as SoftBank-owned Arm. The company has bucked a slowdown in areas of the chip market in the face of rising prices, fears of a global recession and Covid disruptions in China...

“TSMC’s Oct/Nov revenues are on track comparing to what the management guided 2 months ago, despite significant business slowdowns in many other semi names,” Dale Gai, semiconductor analyst at Counterpoint Research, told CNBC via email.

Gai said “high-end smartphones” such as the A16 chip for Apple’s iPhone and the latest semiconductor from Qualcomm contributed to the “majority of its (TSMC’s) seasonal strength.”

My take: As Apple goes, so goes TSMC. And vice versa.

4 Comments

  1. Gregg Thurman said:
    I wouldn’t get too excited about this story. After all, TSMC had a contract with Apple to produce and deliver nnn of chips. Whether Apple used them this quarter or next, Apple took possession per the contract knowing eventually it would need them.

    I guess there is one positive takeaway: that is that it doesn’t believe demand due the the lockdown has been destroyed, only deferred, whatever that amount turns out to be.

    Also, the “surge” isn’t quantified, so we have no way of knowing how it compares YoY. This is important because TSMC experiences a surge every November.

    1
    December 9, 2022
  2. Fred Stein said:
    Yup, I’ve been beating this drum like the energizer bunny; likely to point of annoying.

    Why is it hard for public markets to understand Buffett’s wisdom. Pick companies that perform and have excellent management. Both companies execute and excel on visions dating back decades. Both expand their leads each year. In both cases the founders have moved on. Sadly Steve can’t see Tim’s brilliant accomplishment. Morris can enjoy his successors success.

    Funny thing – Apple’s boasts about their chips that led me to TSMC.

    2
    December 9, 2022
  3. Fred Stein said:
    More:

    To get a bigger picture, check out SemiAnalysis website… “Samsung backstabs”, where Dylan states, “Fabs require extremely high utilization just to break even on the immense capital investment. When the market faces even a minor down-cycle, many fab ventures likely become unprofitable.”

    If the current recession proves more severe, Apple’s and TSMC’s strengths will increase dramatically. Note also: In addition to TSMC have higher utilization rates, they have higher yields compared to their peers. The dynamic duo soar in the BatMobilePhone.

    3
    December 9, 2022

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