Wafer foundry is expected to explode in the Year of the Rat

TSMC's revenue in 2019 was approximately NT$1.07 trillion, setting a new record, and its stock price also hit new highs, giving shareholders a bumper harvest in the Year of the Pig. Looking forward to the Year of the Golden Rat, TSMC's operations are expected to continue to rise, and UMC and World Advanced will also set new historical records at the same time.

Wafer foundry TSMC had an unfavorable operating situation in 2019. Although it was affected by the US-China trade war and inventory destocking in the first half of the year, as the trade war eased in the second half of the year, demand from customers Apple and Huawei was strong, and 7nm shipments grew rapidly, pushing TSMC's performance to record highs quarter by quarter.

TSMC's revenue in the fourth quarter of 2019 exceeded NT$300 billion for the first time, reaching NT$317.237 billion; last year's total revenue was close to NT$1.07 trillion, a year-on-year increase of 3.7%, setting a new historical high.

As the 5G market heats up rapidly, analysts are optimistic that TSMC's 7nm and 5nm processes will have strong growth. Not only is there strong demand for MediaTek's 7nm process and Huawei's 5nm process, TSMC can also get Apple's 5nm A14 processor order alone, and its revenue in 2020 is expected to continue to hit a record high.

In the Year of the Pig, TSMC not only paid out a dividend of NT$8 per share for 2018, but also paid out dividends of NT$2 per share for the first and second quarters of 2019 on October 17, 2019 and January 16, 2020. TSMC shareholders received NT$12.5 per share in dividends alone in the Year of the Pig.

TSMC has a solid position as the leader in wafer foundry with its leading advantages in process technology and promising future operating prospects. It has continuously attracted foreign investment, pushing TSMC's stock price to new highs. In the Year of the Pig, the stock price rose by more than 50%, bringing great benefits to shareholders.

UMC and TSMC's operating performance in 2019 were relatively poor, with revenues declining by 2.02% and 2.22% respectively, and their stock prices rose less in the Year of the Pig than TSMC.

However, in October 2019, UMC acquired all shares of Mie Fujitsu Semiconductor, a 12-inch wafer factory in Japan, and World Advanced Semiconductor acquired GlobalFoundries' 8-inch wafer factory in Singapore, and the transaction was successfully completed on December 31, 2019.

As the benefits of the acquisition take effect, UMC and World Advanced are expected to simultaneously enter a new wave of growth in 2020 and deliver impressive results. Their annual revenues will both set new historical highs. Shareholders are highly expecting whether the stock prices of the two companies can reflect their performance in the Year of the Golden Rat.