TSMC 5nm revenue hit $970 million in Q3 – 7nm process still leads

TSMC is doing very well in the chip manufacturing industry presently. Everything seems to be moving positively for TSMC and it is well ahead of the competition. According to its recent third-quarter revenue report, the company’s revenue hit $12.14 billion. The 5nm process that was put into production this year contributed nearly $1 billion. However, the company’s 7nm process is still its number one source of income.

TSMC’s financial report shows that the 5nm process contributed 8% of the foundry revenue in the third quarter. However, the 7nm has 35% of its revenue. The 16 nm, 28nm, 20nm, and other processes have 18%, 12%, 1%, and 26% respectively. 

TSMC’s 5nm process was put into mass production in the first quarter of this year, but it did not bring them revenue in the previous two quarters. According to TSMC’s third-quarter revenue of $12.14 billion, the revenue of the 5nm process is $970 million.

With the further increase in production capacity, TSMC’s 5nm process revenue in the fourth quarter will increase significantly. In the second quarter financial report released on July 16, TSMC CEO Wei Zhejia revealed that they expect the 5nm process to contribute 8% of their revenue this year.

Compared with the previous quarter, the proportion of the 7nm process in TSMC’s revenue fell by 1%, but it was still higher than 27% in the same period last year, and it was still their largest source of income. 

TSMC’s Q3 net profit is massive

According to the financial report, TSMC’s Q3 net profit was NT$137.3 billion (approximately $4.8 billion), an increase of 36% relative to the same period last year. Much of its profit is as a result of the Bionic A14 and Kirin 9000 massive orders.

TSMC said that its revenue will grow by more than 20%, and it will increase its 2020 capital expenditure. Its target will increase by about $1 billion dollars to between $16 billion and $17 billion U.S. dollars. It also expects 5G and high-performance demand for computing-related applications to be strong.

Before the earnings report, TSMC’s stock price fell by 1.3% on Thursday. The company’s share price has soared about 83% from its low in March. In addition, its market value has reached $414 billion. There are signs that the company is rebounding from the coronavirus pandemic.

With Huawei now out of TSMC’s supply chain, we expect a significant fall in its net profit for Q4 2020. Of course, TSMC will replace the vacuum which Huawei leaves but it may not get as much as Huawei’s orders.