Huawei is once again restricted. Will Jidian cut its capital expenditure in 2020?

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 Huawei is once again restricted. Will Jidian cut its capital expenditure in 2020?


At the investors meeting in April, TSMC reiterated that despite the outbreak of the new crown, its capital expenditure in 2020 will remain at a record level of 15-16 billion US dollars. But as the United States announced a new restriction in mid May, which will take effect in September, forbidding the use of U.S. - made machines or software to design or manufacture chips for Huawei and its affiliates around the world, the industry soon speculated that TSMC would lose this weight class customer, and its profit target for 2020-2021 would be difficult to achieve.

Huawei is now the second largest customer of TSMC, contributing 14% of its revenue share. The two sides have completed the negotiation of capacity planning and mass production plan for 7Nm, 5nm or even 3nm processes. Industry sources said that if Huaweis capacity commitment is not fulfilled, TSMCs revenue and profits, as well as the progress of advanced manufacturing nodes and capacity expansion plans, will be seriously affected.

Many market research institutions quoted the equipment supply chain as saying that TSMC has delayed the purchase order of its 3 -, 5 -, and 7-nanometer process equipment, and they expect that TSMC will reduce its capital expenditure by US $1.5 billion to US $2.5 billion in 2020 and US $12.5 billion in 2021.

Different sounds

However, some equipment manufacturers believe that as Samsung Electronics and SMIC are actively expanding their investment in advanced manufacturing nodes, TSMC will not recklessly slow down its investment momentum, which is a risky move to continue to lead the other two competitors.

At present, most of TSMCs major equipment suppliers are from the United States, Europe and Japan, including applied materials, ASML, lamresearch, Tokyo electron and KLA Tencor, whose business performance and performance guidance best reflect whether TSMC has slowed down procurement or reduced orders.

However, Taiwanese manufacturers in TSMCs equipment supply chain have said that TSMC has not delayed or cancelled the purchase.

As the contract production partner of asmleuv module, Marktech international has orders of at least NT $20 billion (US $66847 million), a record high, and its profit in 2020 is expected to reach a ten-year high, which is mainly due to the accelerated development of TSMC in the 6-nm, 5-nm and 3-nm processes.

Foxicon integrated technology, a subsidiary of Foxconn, is currently a OEM manufacturer of Applied Materials and will continue to ship orders to TSMC, Intel and Samsung until October. The company expects revenue to grow 15% month on month in the second quarter of 2020, after strong performance in the first quarter.

In addition, the United integrated services, which is responsible for the clean room engineering, mechanical and electrical engineering and equipment installation project of TSMCs new plant in Taiwan, has won an order contract worth between NT $50 billion and NT $55 billion for the period 2020-2021.

It remains to be seen how TSMCs capital expenditure will go.

Extended reading: NTT has successfully revealed for the first time the mathematical universal structure behind quantum indirect control, speaking with data! Bloomberg reported that its hard for Britain to abandon Huawei. The State Department of the United States: if Canada allows Huawei to build 5g, the United States will reassess the intelligence sharing relationship. Source: c114 communication network editor in charge: Xue Jingyu_ NBJS10393