On July 25, Beijing time, TSMC, which is listed in the United States, closed up 9.7% and its share price reached 73.9 US dollars, a new closing high. Its market value soared by 34 billion US dollars (238 billion yuan) overnight to 383.3 billion US dollars, and it has become the worlds largest semiconductor manufacturer by market value. Its biggest intraday increase was 14.12% at one time, and its market value reached 398 billion US dollars.
TSMCs surge may be related to two major advantages.
Intel may outsource new business, TSMC has a major breakthrough in 2nm R & D
Intel said earlier that its 7-nm chip process was behind schedule by six months. Intel CEO bobswan said that in the event of an emergency, it would be ready to outsource part of its chip manufacturing and use another companys wafer foundry.
In response, financial services firm Cowen analyst Matt Ramsay believes Intel may plan to commission TSMC to contract chips for it. The news also hit Intels share price, which fell more than 16% at the end of the day, with a market value of $214.2 billion.
In addition, it has been reported that TSMC has also made a major breakthrough in the research and development of 2nm. The industry estimates that TSMCs 2nm will be launched from 2023 to 2024.
Previously, TSMC disclosed at the companys second quarter performance presentation meeting that the companys 3nm (nano) process is expected to be mass produced in 2021, and mass production in the second half of 2022. Compared with 5nm process, 3nm process will bring 70% density increase, 10% - 15% rate gain and 20-25% power increase.
Net profit in the second quarter was 28 billion yuan, and the stock price rose by more than 70%
Before the stock price burst on Friday, TSMCs share price had gone through a round of rise. Based on the low of $42.15 since the end of March this year, the share price of TSMC has risen by more than 70%, which is closely related to its beautiful performance.
Although the global industrial chain has been affected by the new epidemic since this year, TSMC does not seem to be affected much. According to its financial report for the second quarter of fiscal year 2020, TSMCs consolidated revenue in the second quarter of fiscal year 2020 was NT $310.7 billion (about RMB 73.82 billion), a year-on-year increase of 28.9%; and its net profit was NT $120.82 billion (about RMB 28.7 billion), up year-on-year 81%, which not only exceeded analysts expectations, but also reached the highest single quarter growth rate in six years.
At the same time, the financial data also showed that TSMCs gross profit rate was 53%, a record high. In the past 10 years, TSMCs highest gross profit margin quarter was 52.29% of 2016 Q4, with revenue of $8.25 billion.
TSMCs Q2 net interest rate was as high as 38.9%, with a month on month increase of 1 percentage point and a year-on-year increase of 11 percentage points. TSMCs revenue continues to rise, while maintaining an amazing level of profitability.
In view of the excellent performance in the second quarter, TSMC adjusted its income growth forecast for the whole year of 2020 from 10% - 15% to 20%; at the same time, it raised the capital expenditure amount to $16 billion-17 billion; as early as the beginning of 2020, it had predicted that the great depression was coming, and TSMC lowered its income forecast for 2020.
Half of the global chip OEM market
TSMC, fully known as Taiwan integrated circuit manufacturing group, is the worlds leading semiconductor processing enterprise.
According to China Fund News, TSMC, which accounts for half of the global chip OEM market, is the industry leader. Samsung ranked second, but its market share was only 20%. At present, SMIC is also trying to catch up, and its 14nm chip technology has been applied to Huawei mobile phones. However, it is still very difficult to catch up with the 5nm process of TSMC and Samsung.
At present, in the global chip manufacturing industry, there are few manufacturers with high-end chip manufacturing capacity, especially those with manufacturing processes below 7Nm. There are only TSMC and Samsung in the world.
The wafer volume increased by 2.95% to that of Q2. From the process point of view, 7Nm revenue accounted for 36%.
TSMC has higher yield and more stable production cycle. Therefore, TSMC enjoys almost all orders in the 7Nm process field, and has high pricing power. At the same time, TSMC revealed that the current demand for 5nm process is very strong, and this demand will continue until 2022.
In addition, TSMCs 3nm process is expected to be mass produced at risk in 2021 and in the second half of 2022. Compared with 5nm process, 3nm process will bring 70% density increase and 20-25% power increase.
Huaweis worries caused by cut off supply
Huawei is also one of the most important companies in the chip industry. However, due to the ban issued by the United States, TSMC announced on July 16 that it would cut off Huaweis power supply from September 14 If the US ban remained unchanged.
According to the U.S. governments ban, any non-U.S. chip manufacturer must apply to the U.S. government and obtain a license before they can supply Huawei with U.S. technologies and tools. As a result, TSMC, which has not applied to and obtained permission from the U.S. government, cannot process any new orders from Huawei and its Hisense semiconductor company since May 15, and must complete the original orders before September 14.
According to TSMCs financial report in 2019, Huaweis orders account for 14% of TSMCs total business, and Huawei is one of TSMCs most important high-end chip customers (below 14nm), second only to Apples 23%. If the power supply is cut off, then TSMCs high-end chips below 14nm are bound to face a large order gap.
Liu Deyin, chairman of TSMC, said at the press conference that in the short term, the impact of failure to supply to China is inevitable. TSMC is actively cooperating with other customers to fill the gap left by Huawei.
At the same time, this also has a great impact on Huawei. Some people predict that with the large-scale shipment of 5g related equipment, Huaweis chip inventory may only be maintained until the beginning of 2021.
Daily economic news integrates China Fund News, global network, futu securities, Meijing app, etc
Source: Zhang Zutao, editor in charge of daily economic news_ NT5054