IC insights: TSMC's third-quarter revenue will reach US$11.35 billion

According to icinsights, due to the Covid-19 pandemic and the tense trade relations between China and the United States, most IC suppliers experienced weak demand and generally poor sales performance in the first half of this year. However, some IC suppliers still believe that they will achieve better results in the second half of this year.

TSMC is the world's largest semiconductor foundry and a key supplier of 7/5nm application processor equipment. Figure 1 shows TSMC's actual performance in 1H20, 2020. As shown in the figure, although TSMC expects full-year sales this year to "increase by more than 20%", IC Insights believes that its 2H20/1H20 sales will increase by 8%, and the full-year growth rate will reach 24%.

For the third quarter, research institutions expect TSMC's revenue to continue to surge year-on-year. They expect it to reach US$11.35 billion, an increase of US$1.95 billion from US$9.4 billion in the third quarter of last year, a year-on-year increase of 20.7%.

Image source: icinsights

ICIsights believes that Apple's demand for top-tier application processors will undoubtedly be a driving force for TSMC's growth. TSMC released its billionth 7nm IC shipment in the second half of 2020 and expects to mass-produce devices manufactured using its 5nm process technology. Overall, the company expects 5nm shipments in 2H20 to bring in approximately $3.5 billion in revenue, accounting for 8% of total sales in 2020.

Intel, the world’s largest semiconductor supplier, set its full-year sales growth guidance at 4% when discussing actual sales performance in the second quarter of 2020. However, Intel’s 2H20/1H20 guidance is for a 10% revenue decline (Figure 2). The company attributed its strong 1H20 sales and weak 2H20 guidance to some customers increasing inventory, with “safety stocks” of parts expected to run out in the second half of the year given the uncertainty surrounding trade issues.

Image source: icinsights

STMicroelectronics, the world's fourth-largest supplier of analog integrated circuits and a key automotive equipment producer, has high hopes for 2H20. After a sharp decline of 19% in 1H20/2H19, the company expects a strong sales growth of 19% in 2H20/1H20 (Figure 3). The company's sales growth in the second half of this year is expected to be due to a rebound in the automotive industry after an unusually weak 1H20 and increased demand in the industrial sector of the market as the global economy shows a certain degree of stability. However, even after a strong 2H20, ST's total semiconductor sales are likely to fall by 1% this year.