2330.TW - Taiwan Semiconductor Manufacturing Company Limited

Taiwan - Taiwan Delayed Price. Currency in TWD
+7.50 (+2.72%)
At close: 1:30PM CST
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Previous Close275.50
Bid0.00 x 0
Ask0.00 x 0
Day's Range280.50 - 284.00
52 Week Range227.00 - 346.00
Avg. Volume50,119,074
Market Cap7.338T
Beta (5Y Monthly)0.66
PE Ratio (TTM)21.25
EPS (TTM)13.31
Earnings DateApr. 16, 2020
Forward Dividend & Yield15.00 (5.44%)
Ex-Dividend DateJun. 18, 2020
1y Target Est262.88
  • Samsung’s Profit Beat Showcases a Rare Bright Spot in a Pandemic

    Samsung’s Profit Beat Showcases a Rare Bright Spot in a Pandemic

    (Bloomberg) -- Samsung Electronics Co.’s better-than-expected profit revives hopes that a surge in internet usage from people sheltering in place during the Covid-19 pandemic will help make up for a drop-off in demand for smartphones and other consumer electronics.Shares in Korea’s largest company climbed more than 3% after it posted operating profit of 6.4 trillion won ($5.2 billion) in the March quarter, surpassing the average analyst estimate by 3.6%. Sales rose 5% to 55 trillion won, according to preliminary results released Tuesday. The company didn’t provide net income or break out divisional performance, which it will do later this month when it releases final numbers.Samsung -- one of the first major technology corporations to unveil March quarter results -- demonstrates how the novel coronavirus outbreak is exerting an uneven impact on the global electronics sector in the short term. Soaring online activity from gaming to video streaming is driving sales of semiconductors -- the lubricant for the internet and Samsung’s most profitable business -- even as worsening employment prospects curtail spending on gadgets such as the company’s just-released flagship Galaxy S20.The Asian giant’s solid performance underscores expectations for resilient chip demand since Micron Technology Inc.’s stronger than anticipated outlook. That lifted Asian chipmakers such as Taiwan Semiconductor Manufacturing Co. and Nanya Technology Corp. Much now hinges on whether governments can mitigate the fallout from potentially the worst global economic shock in at least a generation.“Right now, we can only project a picture of the second quarter: soaring demand in server chips may offset slump in display, mobile and consumer electronics,” said Song Myung-sup, analyst at HI Investment & Securities Co. in Seoul. “The problem is, if the Covid-19 pandemic continues further, we can’t guarantee that the uptrend in expansion of servers will be sustainable in the second half of this year.”Samsung’s Symptom-Less Earnings Don’t Make It Immune: Tim CulpanAs the world’s largest maker of memory chips, phones, displays and appliances, Samsung is broadly exposed to the economic shocks of Covid-19. Despite Tuesday’s rally, the company’s shares remain down about a fifth since their January 2020 peak. The better-than-expected result unveiled Tuesday was helped by the South Korean won weakening about 5% against the dollar in the first quarter, lifting the value of income repatriated from overseas.Should the pandemic persist into the second half -- a worst-case scenario -- the tech giant foresees missing its own 2020 revenue projections by a double-digit percentage, according to people familiar with internal discussions. It’s grappling with plant shutdowns and store closures this quarter alongside rivals and customers like Apple Inc. and Huawei Technologies Co. At the same time, memory chipmakers have experienced rising demand and prices for DRAM and flash memory used in data centers and cloud service operators.Read more: Working From Home Gives Chipmakers Boost While Others SufferWhat Bloomberg Intelligence SaysSamsung Electronics’ strong 1Q operating profit beat may affirm rival Micron’s upbeat expectations for memory chip demand, despite the Covid-19 outbreak. DRAM contract prices rose in March after reaching a bottom in December, while those for NAND inched up from late 3Q. Chipmakers’ wafer cuts may tighten supply and restore inventory to normal levels.\- Anthea Lai, analystClick here for the research.Contract prices for 32-gigabyte DRAM server modules rose roughly 12% in the March quarter, according to InSpectrum Tech Inc. Prices for 128-gigabit MLC NAND flash memory chips increased about 5.6% in the first three months of 2020. Thanks to growing demand for online services from video-conferences to e-commerce and gaming, prices of server DRAM and enterprise SSD or solid-state drives are projected to keep growing in the current quarter. TrendForce raised its price-growth forecasts on server DRAM to 20%, while it expects enterprise SSD prices to rise by as much as 15%.“The growing demand for server DRAM led to low inventory levels for both clients and suppliers,” TrendForce said in an April 1 note. “Also, following a new round of tenders from Chinese telecom operators in February, the supply of server DRAM has become much tighter, in turn maintaining the upward pull on server DRAM prices.”Samsung’s hardest-hit business was mobile because of disappointing demand for S20 devices released in early March. In the first quarter, the company shut its key Gumi plant several times after discovering infection among employees, prompting the shift of some of output to Vietnam. Lockdowns of major cities and store closures across North America have depressed overall business. Hana Financial Investment expects Samsung to report 62.2 million unit shipments of smartphones for the first quarter of 2020, compared with 71.5 million units a year earlier.“Although semiconductor earnings look set to increase on the back of memory chip price hikes, the divisions selling finished products” will likely see their earnings decline, said Greg Roh, senior vice president at HMC Securities.Samsung’s Beauty and Beast: Fully ChargedFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • TSMC (TSM) Stock Moves -0.06%: What You Should Know

    TSMC (TSM) Stock Moves -0.06%: What You Should Know

    TSMC (TSM) closed at $47.79 in the latest trading session, marking a -0.06% move from the prior day.

  • Huawei Warns of ‘Pandora’s Box’ If U.S. Curbs Taiwan Supply

    Huawei Warns of ‘Pandora’s Box’ If U.S. Curbs Taiwan Supply

    (Bloomberg) -- Huawei Technologies Co. is bracing for its most difficult year on record in 2020, when tightening U.S. sanctions and the Covid-19 pandemic threaten to slam an already slowing business.Rotating Chairman Eric Xu said he’s aware of the potential for Washington to tighten restrictions on the company, including by stopping Taiwan Semiconductor Manufacturing Co. from selling chips to Huawei. The Chinese government wouldn’t tolerate such action and it would irrevocably damage the global supply chain, Xu said in some of Huawei’s strongest comments against the Trump administration’s measures so far.“If the Pandora’s box were to be opened, we’ll probably see catastrophic damage to the global supply chain -- and it won’t just be one company, Huawei, destroyed,” Xu told reporters after unveiling 2019 earnings. “I don’t think the Chinese government will just watch and let Huawei be slaughtered on a chopping board. I believe the Chinese government will also take some countermeasures.”China’s biggest tech company remains in Washington’s cross-hairs even as Covid-19 spreads across the globe. The White House is reportedly considering imposing restrictions on the sale of semiconductors to Huawei by global corporations such as TSMC and Samsung Electronics Co., a move that would effectively deprive the Chinese giant of the most advanced chip technology. That would escalate already damaging restrictions on Huawei, which on Tuesday reported net profit grew 5.6% -- the slowest pace of bottom line growth in three years.“Why can’t China ban the use of American 5G chips, base stations, smartphones and other smart devices based on the same network security reasons?” Xu said, adding he couldn’t confirm reports about curbs on TSMC.Huawei had previously reported sales growth of about 19%, to 859 billion yuan ($123 billion) in 2019, roughly the same as in the previous year. And the Shenzhen-based company’s profit improved to 62.7 billion yuan. But Xu said 2019 was its most difficult year yet, when it was forced to transform its business after expansive scrutiny and sanctions from the U.S. The effort to contain Huawei -- and by extension, China -- forced the company to turn inward.The Trump administration’s campaign to get allies such as Japan and Australia to shut out Huawei gear and phones helped drive sales in the Asia-Pacific down 13.9%, though that was more than offset by a surge at home in China.In the fourth quarter alone, which was most impacted by the U.S. prohibition on Huawei selling Android phones with Google’s mobile services, the company shipped roughly 55 million devices, calculated from the difference between its September shipments update and the year’s total. Of the 240 million Huawei and Honor phones shipped, 6.9 million had fifth-generation wireless networking, an area where the company remains a tech leader.Pelosi Joins Trump in Warning Europe of Huawei’s 5G ThreatContrary to warnings from American lawmakers and diplomats, numerous European countries like the U.K. and Switzerland have opted to use Huawei’s technology in building out their 5G networks. The U.K. and Germany have both echoed U.S. concerns about how far Huawei can be trusted with key infrastructure of the future, but those have not extended to the severity of an outright ban.Huawei faces tremendous pressure in overseas smartphone markets, where the U.S. ban on its use of Google Mobile Services severely undercuts the appeal of its devices. Without the Google Play Store and third-party app ecosystem, Huawei phones simply can’t compete with similarly capable alternatives from the likes of Samsung Electronics Co. and OnePlus. The company reported flat revenue in Europe, the Middle East and Africa alongside the drop in the Asia-Pacific. Those regions were two of its major growth engines in 2018, whereas now 59% of its sales are at home in China.China’s ambitious 5G network construction projects, which started in the second half of last year, also helped Huawei weather the international storm and sustain its core businesses.Huawei Makes End-Run Around U.S. Ban by Using Its Own ChipsFounder Ren Zhengfei initially estimated that Huawei’s May 2019 blacklisting by the U.S. could wipe $30 billion off annual revenues and threaten his company’s very survival, though he has tempered that outlook more recently. Huawei mobilized a massive effort to develop in-house alternatives to American software and circuitry, while U.S. suppliers like Intel Corp. and Microsoft Corp. found ways to continue supplying Huawei vital components it needed to make its products. Huawei is also selling base stations free of American technology in another effort to bypass the U.S. ban.With no relief from U.S. sanctions in sight and the coronavirus pandemic stifling business across all industries, Huawei anticipates its most difficult year yet. Chinese smartphone sales, which the company is now particularly sensitive to, are already hurting. And its global 5G installations, for which Huawei has secured more than 90 contracts worldwide, are hitting the brakes with many countries implementing lockdowns and the global economy at a standstill.(Updates with top executive’s comments from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • TSMC (TSM) Gains But Lags Market: What You Should Know

    TSMC (TSM) Gains But Lags Market: What You Should Know

    In the latest trading session, TSMC (TSM) closed at $49, marking a +0.27% move from the previous day.

  • Bloomberg

    Shielded from Pandemic, Work Continues in World’s Cleanest Room

    (Bloomberg) -- A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside.And as the coronavirus grips the world, it might just be the safest place to work right now.The teams belong to ASML Holding NV, which holds a de-facto monopoly on the industry of extreme ultraviolet lithography machines needed to make next-generation chips. Each cost about 150 million euros ($160 million) apiece and ship mainly to the U.S., Korea and Taiwan, where the likes of Intel Corp., Samsung Electronics Co. or Taiwan Semiconductor Manufacturing Co., known as TSMC, rely on them to make faster, cheaper and more energy efficient semiconductors.ASML manufacturing staff operate in an environment that is literally shielded from the coronavirus pandemic that has forced millions of workers around the world to isolate themselves from colleagues to slow the spread of the disease. As the rest of the Netherlands and much of the continent locks down, work in ASML’s Veldhoven clean-rooms has continued largely unhindered, potentially giving the company an edge for when corporate life returns to normal.“So far we have been able to keep our production going,” said Frits van Hout, ASML’s chief strategy officer, ASML. “The situation is of course dynamic. We encounter challenges as with every lockdown our suppliers will be affected, directly or indirectly.”Keeping DistanceLike other companies, ASML has also implemented a raft of contingency measures –from segmenting staff to drawing up plans if disaster strikes at a key supplier -- so it can keep manufacturing equipment for chip-makers around the world. Workers are split into two teams and are screened for virus symptoms via infrared thermal cameras at the entrance of the clean room in Veldhoven.Social distancing protocols are in effect, and the company has spaced out the morning and night shift to ensure the groups don’t meet, ASML said.Clean rooms are highly specialized infrastructure that’s costly to set up and maintain, making that kind of environment difficult to replicate in other industries. The biggest risk for the company lies not so much in its own operations seizing up but in a potential breakdown of its 5,000 suppliers, 790 of which provide materials and equipment that are used directly to produce the ASML systems.Besides its ultra-sanitized work environment, ASML has the benefit of making machines that are considered almost recession-proof, given its commanding lead in an industry on the cusp of another technological leap: high-speed 5G networks.On Track“Most customers want EUV and if ASML cannot deliver due to such a factor, then they know they have to wait until the next quarter because you cannot get it anywhere else,” said Marcel Achterberg, executive director of equity research at KBC Bank.The prized EUV machines are the size of a bus. Customers can order older equipment, but EUV delivers better resolution, smaller components and improved performance in the chips it produces.They’re a crucial source of revenue for ASML’s customers, too. By the end of next year, as much as half of TSMC’s revenue will depend at least partly on some EUV processes, according to Bloomberg Intelligence analyst Masahiro Wakasugi.Volume production of TSMC’s most cutting-edge 5-nanometer chips, which use EUV, is still “on track” for the first half of 2020 as previously stated by management, TSMC spokeswoman Nina Kao saidFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • TSMC (TSM) Stock Sinks As Market Gains: What You Should Know

    TSMC (TSM) Stock Sinks As Market Gains: What You Should Know

    TSMC (TSM) closed the most recent trading day at $43.88, moving -1.1% from the previous trading session.

  • Too Much Love for TSMC Proves Costly in Global Market Rout

    Too Much Love for TSMC Proves Costly in Global Market Rout

    (Bloomberg) -- Taiwan’s largest stock may be paying a price for being the darling of equity investors.Heading into 2020, analysts and strategists were falling over themselves to outline reasons Taiwan Semiconductor Manufacturing Co. would continue to outshine global peers. Its market value rose another $13 billion in the opening two weeks of the year, with shares continuing to set record highs. Now, investors are sitting on an 8.8% loss for 2020 after TSMC notched its lowest close in four months Wednesday.As TSMC shares are Taiwan’s biggest beneficiary of international cash, they’re also at the front of the line when foreigners pull back. As risk assets globally have slid to start 2020 due to the coronavirus outbreak, foreigners have sold more than $8 billion of Taiwan stocks, second most in Asian markets, according to data compiled by Bloomberg. Net foreign selling on Monday was $1.8 billion, according to exchange data, the most since 2007.TSMC’s 2020 stock drop, in line with the Taiex index, has occurred even as company revenue grew strongly after a weak start to 2019. Combined sales for January and February were a record NT$197.1 billion ($6.6 billion), 42% higher than a year earlier. Analysts see TSMC remaining on track to meet the better-than-expected revenue forecast given in January.This quarter is too soon to see material virus-related impacts for the likes of TSMC because of the time it takes to make wafers, said Citigroup Inc., which predicts record March revenue of above NT$110 billion. It added that even if the company sees some second-quarter order cancellations, the spots could be immediately filled by excess orders TSMC has. That makes the firm “the most resilient of its peers.”But Citigroup, as well as Daiwa Capital Markets, does say that TSMC will feel some pressure if the virus outbreak continues well into 2020. For now, though, Daiwa suggests investors “accumulate the stock on any weakness.”(Updates market levels in second and fourth paragraphs.)To contact the reporter on this story: Cindy Wang in Taipei at hwang61@bloomberg.netTo contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Kevin Kingsbury, David WatkinsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Huawei Makes End-Run Around U.S. Ban by Using Its Own Chips

    Huawei Makes End-Run Around U.S. Ban by Using Its Own Chips

    (Bloomberg) -- Huawei Technologies Co., the Chinese technology giant barred from doing business with U.S. suppliers, is finding a way around the strict limits imposed by the Trump administration.The Commerce Department, citing national security concerns, has largely forbidden American companies from selling Huawei the computer chips it needs to make a piece of equipment integral to newly introduced high-speed wireless networks. In response, China’s largest technology company ramped up its own capabilities to manufacture the gear, which is known as a base station.In a sign that the self-reliance is working, Huawei in the fourth quarter sold more than 50,000 of these next-generation base stations that were free of U.S. technology, according to Tim Danks, the U.S.-based Huawei executive responsible for partner relations. That’s only about 8% of the total base stations that Huawei’s sold as of February, but the company is quickly ramping up at its secretive HiSilicon division to make more of these American component-free devices, Danks said.“It’s still our intention to return to using U.S. technology,” he said. The longer Huawei goes without access to U.S. suppliers, the more unlikely it is to be able to return to using them, Danks added.A base station is a typically suitcase-sized piece of machinery that’s used to help connect wireless phones to fixed-line networks carrying internet traffic, and it’s an essential ingredient in the next, or fifth, generation of mobile networks. Popular among telecommunications providers, Huawei’s base stations are widely considered among the most reliable for the price.Read about how Trump’s blacklisting of Huawei is failing to halt its growth.U.S. officials accuse Huawei of stealing valuable intellectual property and violating a trade embargo with Iran. The Trump administration blacklisted the company last year, saying there’s a risk Huawei could give Beijing access to sensitive data coursing through telecommunications networks that employ its gear. Huawei has denied the allegations. Critics also said the U.S. government imposed the sanctions to hobble China’s leadership in key aspects of 5G technology.As of early February, Huawei had shipped about 600,000 5G base stations to mobile phone companies racing to upgrade networks to the new standard, which is designed to deliver data at faster speeds to a broad range of wirelessly connected devices -- not just mobile handsets. Most of these base stations were made using stockpiled chips bought before the ban.While Huawei doesn’t disclose its suppliers, base stations typically rely on a kind of processor called a field programmable gate array that’s made by Intel Corp., a chipmaking colossus based in Santa Clara, California, and Xilinx Inc., in neighboring San Jose. Those chips provide flexibility that makes it easier to update machines as new standards and features are added. Huawei’s chips are application-specific, meaning they’re tailored to particular functions and it takes more time and money to replace them. That’s a disadvantage at a time when new technology, such as 5G, is in its infancy and still subject to big changes.Read more: Huawei Engineers Go to 24-Hour Days to Beat Trump BlacklistThe U.S. initially clamped down on all shipments of U.S. supplies to Huawei, which had spent more than $10 billion a year on U.S. products, but later began making some exceptions. Xilinx and fellow chipmakers Micron Technology Inc. and Broadcom Inc. have all reported falling earnings on reduced or eliminated sales to Huawei.Attempts by the U.S. to persuade European and other allied countries to ban Huawei equipment have fallen short, and chipmakers in Asia and Europe continue to supply it.For their part, American chipmakers have argued that banning the supply of parts that Huawei can get elsewhere is counterproductive, saying that the lost revenue crimps research and development budgets and the ability to produce the best chips in the future. Huawei’s HiSilicon chip unit designs semiconductors and has them manufactured by industry-leading plants owned by Taiwan Semiconductor Manufacturing Co. But Washington is even now said to be looking into ways to curb the world’s largest contract chipmaker on grounds of national security, and deprive Huawei of its largest semiconductor manufacturing partner.The Chinese company led the market for base stations with a 28% share last year, according to New Street Research. The investment company predicts demand for that equipment will rise this year with the 5G network buildout. Nokia Oyj and Ericsson AB are its two largest competitors in this market.How Huawei Landed at the Center of Global Tech Tussle: QuickTake(Updates with details of TSMC’s role in the 11th paragraph)\--With assistance from Gao Yuan.To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Tom Giles, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • GLOBAL MARKETS-Apple virus warning shakes stocks, euro near three-year low

    GLOBAL MARKETS-Apple virus warning shakes stocks, euro near three-year low

    World stocks markets were knocked off record highs on Tuesday as two of the world’s mega companies and Europe's largest economy, Germany, reported damage from the coronavirus outbreak. Apple’s stock fell almost 6% in Frankfurt at one stage and Wall Street looked set for a rocky ride later after the iPhone maker warned it was unlikely to meet the March quarter sales guidance that it had set just three weeks ago. China sensitive stocks led the falls but the mood had been darkened further by a far-worse-than-feared German investor sentiment survey pointing to a deepening manufacturing recession there.

  • Exclusive: Samsung wins 5-nanometer modem chip contract from Qualcomm - sources

    Exclusive: Samsung wins 5-nanometer modem chip contract from Qualcomm - sources

    SAN FRANCISCO/SEOUL (Reuters) - Samsung Electronics Co Ltd's semiconductor manufacturing division has won a contract to make new Qualcomm Inc 5G chips using its most advanced chip-making technology, two sources familiar with the matter said, boosting the Korean firm's efforts to gain market share against rival Taiwan Semiconductor Manufacturing Co . Samsung will fabricate at least some of Qualcomm's X60 modem chips, which will connect devices such as smart phones to 5G wireless data networks. The X60 will be made on Samsung's 5-nanometer process, the sources said, which makes the chips smaller and more power-efficient than previous generations.

  • Bloomberg

    Qualcomm Adds Another New Chip Aimed at Pushing 5G Adoption

    (Bloomberg) -- Qualcomm Inc. announced its third new chip for 5G smartphones that the company said will help cellular service providers and deliver another improvement in mobile phone performance.The X60 is the chipmaker’s latest modem for the fifth-generation networks that debuted only last year and will become the mainstream service this year. The company said phones based on the new chip will go on sale in 2021. A modem is a type of chip that turns radio signals into voice and data.The part will allow a step forward in what’s called carrier aggregation, according to San Diego-based Qualcomm. That means phones will use a combination of the new higher frequencies that make up 5G and the airwaves relied on by older networks. Data will be sent to and from phones much quicker than using one narrower piece of spectrum.Phone companies, which typically own the rights to use scattered batches of airwaves, will be able to get more efficiency out of their expensive assets. That should help persuade the carriers, who are key in the rollout of 5G, that it’s in their interests to speed up introduction of the new service, according to Qualcomm.Qualcomm’s chip revenue has reflected the surge and the maturing of the smartphone industry. The company’s semiconductor sales peaked in fiscal year 2014 at more than $18.6 billion. In the last few years as consumers have held onto their phones longer, revenue has declined to $14.6 billion.The chip will also be the first to be made with 5-nanometer technology, the most advanced production technique in the semiconductor industry. Qualcomm outsources its manufacturing to companies such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.Qualcomm was among the biggest beneficiaries of the shifts to previous generations of mobile phone technology, when its chips became the market leader. In the decade since 4G began, smartphone sales have slowed given incremental improvements in form and function. That has hurt Qualcomm’s growth as the company is facing more competition, including from customers such as Samsung and Huawei Technologies Co.To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Alistair Barr at abarr18@bloomberg.net, Andrew Pollack, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Apple's Virus Cut Puts All Eyes on Tech Bellwether

    Apple's Virus Cut Puts All Eyes on Tech Bellwether

    (Bloomberg Opinion) -- Apple Inc. has thrown out its March-quarter revenue guidance three weeks after providing it.Despite factoring in possible downside from the China coronavirus outbreak in its original forecast, the iPhone maker realized that things have deteriorated much more than it had anticipated. It gave no new figure and merely said the old one no longer applies, an admission that the company really can’t quantify the impact.While we should expect similar downbeat tones through the rest of the sector, this really means we should keep tabs on the one company that sits at the heart of the global technology supply chain: Taiwan Semiconductor Manufacturing Co.Apple is TSMC’s largest customer. When the chipmaker gave its own first-quarter and full-year forecasts Jan. 16, the world had barely heard of the disease now riveting its attention.Since then, Apple has shut stores in China and downstream assemblers like Hon Hai Precision Industry Co. have struggled to ramp up production after the Lunar New Year break amid continuing quarantines and a shortage of workers willing to return to the factory floor.Nvidia Corp., which designs graphics chips, is another major client of TSMC. On Feb. 13, it said the virus had cut its forecast by $100 million. That’s only around 3% of expected revenue for the quarter, but it all eventually adds up. Alibaba Group Holding Ltd., not a direct customer, forecast a decline in revenue from its core businesses as consumers on its e-commerce platform shy away from spending. At least some of those lost sales will be electronics products, which use chips made by TSMC.Chinese companies, including Huawei Technologies Co., accounted for 20% of TSMC’s revenue last year. With numerous enterprises in China on lockdown, adding to the squeeze on both demand and production, it’s unlikely such clients will be able to escape the impact.And last week, wireless industry association GSMA scrapped its annual Mobile World Congress scheduled for Feb. 24 in Barcelona because most of its major participants had already pulled out. This isn’t a consumer event, but the cancellation shows the breadth and reach of the outbreak’s impact on business. Whichever way you look at it, the global tech slowdown leads back to TSMC. Revising guidance mid-quarter isn’t without precedent, and TSMC usually does with a statement filed mid-afternoon Taipei time. It did so a year ago this week, cutting its sales and profit outlook after facing troubles with chemicals used in the manufacturing process. The result was a 10% reduction in operating profit. Just a few months before that, a production hiccup caused by a computer virus in its equipment hurt gross profit by around 5%. An earthquake four years ago sliced operating income by about 7%. The biggest mid-quarter guidance cut I could find is the 25% hit to operating profit that it took in December 2008 as the financial crisis brought the world economy to a halt.To be sure, it’s not certain that a cut will be necessary this time. Clients may decide that they want to keep building up inventory of the chips that come out of TSMC’s factories. But at some point, end-demand may dictate a more cautious approach to procurement. This epidemic is proving hard to quantify, so TSMC’s biggest challenge may not be whether to revise guidance, but what new number to give. To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • GLOBAL MARKETS-Stocks fall after Apple warns on coronavirus impact

    GLOBAL MARKETS-Stocks fall after Apple warns on coronavirus impact

    Asian shares fell and Wall Street retreated from record highs on Tuesday after Apple Inc said it will not meet its revenue guidance for the March quarter as the coronavirus outbreak slowed production and weakened demand in China. China’s central bank cut the interest rate on its medium-term lending on Monday, which is expected to pave the way for a reduction in the benchmark loan prime rate on Thursday.

  • Bloomberg

    Applied Materials Gives Bullish Outlook on Chip Industry Uptick

    (Bloomberg) -- Applied Materials Inc. gave a bullish sales forecast for the current quarter suggesting its chipmaker customers have returned to spending more on their factories.The Santa Clara, California-based company is the largest maker of machinery used in the manufacture of semiconductors, which are among the most important parts of the electronics supply chain. Its customers include Samsung Electronics Co., Intel Corp. and Taiwan Semiconductor Manufacturing Co. That makes Applied Materials’ results and forecasts important early indicators of future demand in the electronics industry.Key InsightsFiscal second-quarter sales will be $4.34 billion, plus or minus $200 million, Applied Materials said Wednesday in a statement. That compares with analysts’ average estimate of $4 billion, according to data compiled by Bloomberg.Adjusted earnings will be 98 cents a share to $1.10 a share in the period ending in April, the company said. Analysts projected 92 cents.“We believe we can deliver strong double-digit growth in our semiconductor business this year as our unique solutions accelerate our customers’ success in the AI-Big Data era,” Chief Executive Officer Gary Dickerson said in the statement.Chip-equipment makers often experience wild earnings swings. Machines cost tens of millions of dollars each. Delaying factory build outs is one of the fastest ways a chipmaker can preserve cash when they’re unsure of future demand.Net income was $892 million, or 96 cents a share, in the fiscal first quarter, compared with $771 million, or 80 cents a share, a year earlier.Revenue gained 11% to $4.16 billion in the period ended Jan. 26, making it the first quarter of year-over-year growth in five quarters. Analysts were looking for $4.11 billion.Stock ReactionShares rose about 1% in extended trading after the announcement. The stock closed at $65.37 in New York and has increased 60% over the last 12 months.More InformationFor more details, click here.To see the statement, click here.To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Alistair Barr at abarr18@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Alphabet Cracks the Lid on a Black Box That’s Still Too Opaque

    Alphabet Cracks the Lid on a Black Box That’s Still Too Opaque

    (Bloomberg Opinion) -- Let me start by saying that I am new to writing about Alphabet Inc. I’m usually based in Asia, where I write about Foxconn Technology Group, Samsung Electronics Corp. and Alibaba Group Holding Ltd., among others.These are huge companies that lead their sectors and have different levels of transparency. When I started preparing to cover U.S. technology giants, I figured that the high standards of earnings disclosure at the center of global capitalism would make life a little easier.Then I started looking at Alphabet Inc., which on Monday reported revenue that missed some estimates. It beggars belief that for more than a decade analysts, investors and traders were forced to navigate blind through the black box that was its earnings report.Then came Monday’s announcement.For the first time, executives deigned to tell investors just how much revenue comes from YouTube ($15.1 billion) and from its cloud business ($8.9 billion). It feels like a revelation, as though we’ve been let in on a secret. But when you live in a dark cave, even candlelight can seem bright.While I welcome this move toward transparency, it feels more like a company trying to pacify investors rather than truly inform them. It’s long overdue, but the company can do even more.Before the fourth-quarter earnings announcement, Alphabet broke down advertising revenue only by properties, by network members’ properties, other revenue and other bets. By region, investors are given EMEA, APAC, U.S. and Other Americas. And it shares traffic acquisition costs. Now it’s added two more line items: YouTube, the world’s most ubiquitous video-sharing platform, and Cloud — a hot business that competes against Amazon.com Inc., Microsoft Corp. and dozens of others.Despite this additional information, I still don’t think investors truly have an understanding of exactly where this company gets its revenue, what divisions make and burn money, and which platforms are lucrative and which are loss leaders (or just losers).Google search and other advertising accounted for 61% of sales last year; that’s a very big pie that could certainly by sliced up further. It doesn’t feel like a coincidence that the two extra divisions it’s breaking out are the ones that grew the fastest last year.Still lacking is any clarity on the product that gives directions to more people than anyone else (Google Maps), the one that has become one of the most pervasive email services (Gmail) nor the operating system that’s in the hands of literally billions of people across the planet (Android). I don’t own shares in Alphabet or any company I cover. But as an investor, I’d want to understand just how Google monetizes the Android operating system and whether that’s improving or deteriorating in tandem with the spread of smartphones globally. I’d also like to know whether Maps and Gmail are winners or loss leaders. Of course, it would be fascinating to know how that $1 billion HTC Corp. acquisition is faring, given that it’s meant to be a springboard into hardware devices that pit Google against its own Android partners.I guess Alphabet just lumps all this in with Google search or “Other.” Investors are right to want more information.And it’s not some esoteric pondering. There’s evidence to suggest that disclosure truly matters. For example, a study by Stanford University accounting professor Mary Barth and her co-authors found that “firms with more transparent earnings enjoy a lower cost of capital.” And Professor Robert G. Eccles of the University of Oxford and previously of Harvard Business School has written numerous papers discussing transparency from different angles, including the conclusion that the U.S. ranks low in terms of quality of disclosure.Amazon.com Inc. is an example of a company that’s improving. Its disclosures, in my opinion, have become more enlightening over the years to the point that observers can analyze multiple slices of the business to get a sense of which units are more profitable, which are growing, and where it’s making money. Investors can see, for example, that its overseas business is a loser and physical retail shrank. Yet those facts didn’t stop its market value from surpassing $1 trillion last week. Amazon still falls a little short, though.For a gold standard in transparency, let me offer up Taiwan Semiconductor Manufacturing Co., which trades in New York and Taipei. Despite being a $270 billion company entrusted with the secrets of the world’s most important technology clients, the chipmaker offers so much information about how it operates that you could almost replicate its business model. It may be worth noting that both TSMC and Amazon provided better risk-adjusted returns over the five years to Dec. 31 than Alphabet, though remember that correlation doesn’t equal causality.So while I applaud Alphabet on these latest disclosures, there’s no doubt that the world’s biggest search engine has a whole lot more to share.To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Samsung Profit Slides 38% With Stubborn Memory-Chip Slump

    Samsung Profit Slides 38% With Stubborn Memory-Chip Slump

    (Bloomberg) -- Samsung Electronics Co. reported a 38% decline in profit due to falling memory chip prices, a warning sign for the global technology industry as it navigates trade tensions and the coronavirus outbreak.Net income tumbled to 5.23 trillion won ($4.4 billion) for the three months ended December, compared with the 5.31 trillion won average of projections. The miss is a surprise because Samsung carefully orchestrates earnings, including reporting preliminary numbers a few weeks before final results. The early numbers this month beat analyst estimates.Samsung has been struggling with a stubborn slump in the memory chip business, historically its most profitable division, and said the weakness may affect first quarter results. The company also flagged soft demand in the display business for some premium mobile screens and a bigger loss on large displays because of sliding LCD prices.“There are too many factors that need to be considered to conclude that we have entered into a definite demand upcycle,” said Jinman Han, senior vice president of the semiconductor business at Samsung, highlighting macroeconomic and geopolitical uncertainties that may have a negative impact in the future.The coronavirus that began in China has closed stores and factories in the country, the manufacturing base for much of the tech industry. Several companies, including Apple Inc., have said they are uncertain how the outbreak will affect them.Samsung shares fell 3.2% in Seoul. They had increased 5.9% this year through Wednesday, after rising about 44% in 2019. Operating profit was 7.16 trillion won on sales of 59.9 trillion won, the company said, in line with preliminary numbers released earlier this month.​Apple, a rival and customer, reported strong earnings this week, sending shares to a record in U.S. trading. A surge in iPhone sales pushed the Cupertino, Calif.-based company into an approximate tie with Samsung for smartphone shipments in the fourth quarter, according to market researchers.Earlier this month, chip giants Taiwan Semiconductor Manufacturing Co. and Intel Corp. provided bullish outlooks for 2020, driven by demand for cloud-computing centers and fifth-generation smartphones.Samsung, SK Hynix Inc. and Micron Technology Inc. together control more than 90% of the market for dynamic random access memory, or DRAM, chips, used in everything from data servers to smartphones. Spot prices of DRAM and NAND started increasing in December after getting hammered for a year amid rising trade tensions between the U.S. and China as well as plateauing smartphone sales.​The chip industry has been anticipating a recovery as the roll-out of fifth-generation wireless technology spurs higher demand for memory and greater speeds to process data. Samsung did say there are signs of recovering demand from data center customers and wireless operators.Contract prices for 32-gigabyte DRAM server modules fell about 5.9% in the December quarter, narrower than the 14% slide of the September quarter, according to InSpectrum Tech Inc. Prices for 128-Gb MLC NAND flash memory chips held steady in the final three months of 2019.“Memory-chip suppliers still have a high level of inventories,” said Lee Joo-wan, research fellow at Hana Institute of Finance. “As the first half of the year is off-season, it may take time for recovering prices to be reflected in the performance of suppliers.”Samsung’s smartphone division had a stronger quarter, posting 2.52 trillion won in operating income, up from 1.51 trillion won a year earlier. Although the total shipments of smartphones slightly decreased, high-end devices such as the Galaxy Note 10 and Galaxy Fold boosted profits in the fourth quarter.The average selling price of Samsung handsets and tablets was $216 in 4Q, which the company forecasts will increase this quarter as it launches new flagship and premium models. Samsung’s new clamshell-type foldable phone, which will be unveiled Feb. 11, is expected to further fuel growth, said Greg Roh, senior vice president at HMC Securities.Samsung’s operating profit from its display business was about 220 billion won, down from about 970 billion won a year earlier. The company is investing heavily in flexible organic light-emitting diode panels, upgrading its technology to ward off rising competition from Chinese suppliers such as BOE Technology Group Co.The consumer electronics unit, which includes TVs and appliances, had operating profit of about 810 billion won.(Updates with closing share price in sixth paragraph)To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter Elstrom, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Samsung Fails to Deliver the Expected Sunshine

    (Bloomberg Opinion) -- Samsung Electronics Co.’s earnings report and outlook reflect doom and gloom. Many are surprised. Positive signs from chip rival Taiwan Semiconductor Manufacturing Co. and smartphone stalwart Apple Inc. had fed the belief that the South Korean giant would put the worst behind it. The key takeaway here is that a rising tide doesn’t lift all boats.On the surface, as the one of the world’s biggest technology companies, it might be reasonable to suggest that Samsung ought to benefit from the turnaround enjoyed by major rivals.  In reality, a major reason why Samsung is suffering while others rebound is that the company’s big strengths — memory chips and displays — are precisely the weakest parts of the tech sector right now.Its semiconductor unit posted a 56% drop in operating income for the period and its display business fell 77%. Between them, these component divisions usually contribute half to two-thirds of its profit. TSMC, Intel Corp. and even Advanced Micro Devices Inc. don’t dabble in such commodity products. When things are good in memory and displays, Samsung soars because it’s the world’s largest supplier of both. But when times are bad, like now, it suffers the most. That pain will continue in both divisions this quarter, with executives noting in a conference call that continued weakness in demand will hurt both revenue and profits.Bulls will find positive signs if they want. The memory chip market will surely improve as the year progresses, but heck, it couldn’t get much worse. And the whole world — from TSMC to Intel to Xiaomi Corp. — is betting that a 5G rollout will juice sales across the board. Just because TSMC, Apple and Intel reported solid results and gave optimistic outlooks doesn’t mean that every company in the sector is set to benefit from a turnaround in hardware. AMD, Intel’s chief competitor in computer chips, provided guidance just a day earlier that could be characterized as a bit light. Its shares fell 6%, their largest decline since August.Samsung’s 1.5% miss on net income was a break from the previous two quarters, when it surpassed analyst estimates. We already knew sales and operating figures from preliminary results provided earlier this month that hinted that things had reached a bottom and pointed to positive signs ahead. Operating income fell 34%, but was better than estimates, which makes this weak net profit figure confounding.The only division that didn’t share the pain is smartphones, a sandbox that Apple also plays in. Operating profit from that division climbed 67% from a year prior. But Samsung noted that the figure will remain only “steady” this quarter since an expected revenue boost from new models, including a foldable handset, will be offset by higher marketing costs. In the end, it may be best to look at reality. Samsung has chosen a strategy that allows it to dominate a select part of the tech industry. Unfortunately, that means feeling the most pain when such a bet doesn’t pay off.To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Intel Can’t Take Off Another Round in Chip Battle

    Intel Can’t Take Off Another Round in Chip Battle

    (Bloomberg Opinion) -- Intel Inc. closed out 2019 learning the hard lesson that making cutting-edge semiconductors is truly difficult.Like a prizefighter who refuses to admit he just hit the mat, the world’s biggest chipmaker is coming out swinging. And it should, because how it gets through 2020 could decide the company’s fate. Once the most advanced supplier of semiconductors, Intel struggled last year to ramp up production of chips that use its latest 14-nanometer process node, “letting customers down,” as CEO Bob Swan said in October. Its full-year results released Thursday showed that revenue climbed 2% and that net income was flat — hiding the fact that Intel dodged a bullet when it wasn’t able to supply enough of its most advanced products when clients needed them most.It tried to offer some reassurance three months ago by noting that it would increase 14-nanometer capacity 25% this year while raising capital spending to nose-bleed levels. To help overcome that slip-up, executives are keen to tell investors how many customers have signed up for its latest offerings, including a chip dubbed Ice Lake and an upgrade to its Comet Lake mobile processor, which use the next-generation 10-nanometer process. In reality, Intel is badly lagging behind both contract manufacturer Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. TSMC, for example, started selling its 10-nanometer chip technology in mid-2017 and last year boosted revenue from its more advanced 7-nanometer offerings by more than 200%. When Intel eventually hits 7 nanometers in 2021, it will be almost three years behind.Intel’s rebuttal is that so-called process-node technology isn’t the only thing. It’s right, and clients should look at total system performance to see how all the parts — the processor, memory and controllers — all slot together. No other company in the world can offer the breadth and depth that Intel can.But with Advanced Micro Devices Inc. back in the game after a decade in the wilderness and a raft of chip designers ready to tap TSMC’s technology advantage, Intel would be foolish to rest on the belief that it can stay ahead of the game while lagging behind on technology. It knows this and has committed to speeding up its migration from the pace of a new node every five to seven quarters to as little as four quarters. Yet investors ought to also note that the introduction of a new node compresses margins during the early stages before better yields provide economies of scale later. A quicker timetable won’t allow as much time to enjoy the upside before the next margin crunch comes.Intel’s strategy to offset this squeeze is to tap continued growth in the data-center market. Cloud providers like Amazon.com Inc., Alphabet Inc.’s Google and Alibaba Group Holding Ltd. are among customers for its 14-nanometer Cascade Lake products, while the global 5G rollout is expected to provide a couple of solid growth years. Its Data Center Group accounts for 32.6% of revenue but 46.4%  of operating income, making it Intel’s most lucrative business unit by operating margin.But that business relies on Intel’s ability to churn out leading-edge chips that, even if not equivalent to what TSMC can offer clients, won’t be too far behind. A data center operator might be willing to forgive a single-generation lag, reasoning that the broader platform integration Intel offers can provide the cost-benefit metrics it needs. A two-generation delay is hard to overlook, though. Intel’s size and strength means it won’t be easily knocked out. But it needs to get through this year unscathed if it’s to remain the undisputed heavyweight champ.(Updates with details about Intel’s 10-nanometer offerings in the fourth paragraph.)To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    ASML Chief Dismisses U.S., China Tensions as a Headache

    (Bloomberg) -- ASML Holding NV’s top executive brushed off concerns about tensions between the U.S. and China, a market that’s growing in importance to the Dutch chip gear-maker.“Someone needs to make those chips and to make those chips you would need EUV, and there is basically only one place where they can get it,” Chief Executive Officer Peter Wennink said in an interview with Bloomberg Radio, referring to its advanced lithography equipment. “For our total business it doesn’t really matter.“ASML, which has a monopoly on advanced lithography equipment needed to make next-generation chips, is already a crucial supplier to Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. but hopes to drive deeper into China. Beijing wants to build a world-class homegrown chip industry to wean itself off foreign imports -- an effort that would need ASML’s one-of-a-kind machines. Yet it’s faced difficulty getting the Dutch government to renew a license to export to China amid ongoing trade tensions.ASML shares rose 0.2% at 1:14 p.m. in Amsterdam trading.“It’s up to the Dutch government to determine whether there is a national security risk and of course there are views in the U.S. and China whether that’s a risk,” Wennink said, adding that the company has responded to requests for information from the Dutch government.Asked whether he was optimistic about obtaining the license, Wennink said “the Dutch government takes very due care when it concerns the facts and the circumstances.”Read more: China Stockpiles U.S. Chips as ‘Silicon Curtain’ DescendsChina relies on imported chip manufacturing equipment for its audacious ambition of creating a self-reliant semiconductor industry, which supplies key components for a wide spectrum of electronics from smartphones to satellites. ASML is an essential link in that plan, which will drive Chinese purchases of more than $30 billion of semiconductor equipment between 2020 and 2021, according to industry organization SEMI. China’s Ministry of Foreign Affairs said in a statement last week the Netherlands should make an objective decision on ASML’s exports based on its own interests.U.S. PressureEuropean businesses have been caught in the middle of trade tensions between the U.S. and China, even as Washington and Beijing last week sealed the first phase of a trade deal. But the U.S. still maintains tariffs on roughly two-thirds of imports from China and both sides still need to negotiate the pact’s second phase, with discussions expected to be difficult.U.S. officials have urged allies to scrutinize business ties with Beijing, invoking concerns around national security and espionage. The White House, concerned about China’s ambitions to dominate a swath of technology from AI to semiconductors, has sought ways to contain the country’s rise. China, meanwhile, has threatened European countries with retaliation on trade if its companies are shunned.European telecom operators are among those squeezed between the two major world powers after Washington called on European governments to exclude Huawei Technologies Co.’s equipment from the build-out of their 5G networks.The Dutch government has held back on renewing the license ASML needs to export its extreme ultraviolet lithography machines under pressure from U.S. officials, Reuters reported this month. That equipment is key to any chipmaker that wants to fabricate next-generation chips, say of 7 nanometer or lower nodes.Last week, U.S. ambassador to the Netherlands Pete Hoekstra told Dutch newspaper Het Financieele Dagblad that ASML’s technology “doesn’t belong in certain places,” suggesting China. The Chinese ambassador, Xu Hong, had warned days earlier in the same paper that the relationship between the Netherlands and China was at risk if the government blocks EUV machine exports.For its part, the Netherlands says it will take its own decision on the matter, independent of foreign influence. “They are free to express their view and we take note of that, but it is not decisive,” Dutch Prime Minister Mark Rutte said of the U.S. and Chinese ambassadors’ comments last week.ASML’s EUV technology has both civilian and military applications and therefore is subject to EU dual-use licensing obligations under the Wassenaar Arrangement, according to the Dutch Foreign Ministry.EUV LicenseWennink said at a press conference the Dutch government had asked the company questions about the EUV technology, how it works, and who the customer is. The level of detail the government is seeking “is probably more than they would normally do,” he said.The delay in getting the EUV license has “zero” impact on the company’s business, he said. The licensing issue concerns their first-ever EUV order from a customer in China, where few companies are at the stage of ordering the cutting-edge technology. ASML mostly ships the machines, which cost roughly 150 million euros, to the U.S., Korea and Taiwan.The company forecast first-quarter sales largely in line with analyst expectations and said it won orders for nine more of its EUV lithography machines in the last quarter. The Dutch company said it expects sales of 3.1 billion euros ($3.4 billion) to 3.3 billion euros for the first quarter, compared with an average estimate of 3.26 billion euros.ASML also announced a share buy-back program of as much as 6 billion euros over three years, as it said it expects to win 4.5 billion euros in EUV revenue this year.(Updates with CEO comments from the 15th paragraph)\--With assistance from Joost Akkermans and Gao Yuan.To contact the reporters on this story: Ellen Proper in Amsterdam at eproper@bloomberg.net;Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Amy ThomsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • New Low-Cost iPhone to Enter Mass Production in February

    New Low-Cost iPhone to Enter Mass Production in February

    (Bloomberg) -- Apple Inc. suppliers plan to begin assembling a new low-cost iPhone in February, people familiar with the plan said, as the company looks to address a wider swath of the global smartphone market ahead of its 5G handsets later this year.The Cupertino, California-based company is expected to officially unveil the new phone as early as March, one person familiar with its road map said. The assembly work for the new handset will be split among Hon Hai Precision Industry, Pegatron Corp. and Wistron Corp., the people added.This will be the first lower-cost iPhone model since the iPhone SE. It will look similar to the iPhone 8 from 2017 and include a 4.7-inch screen, Bloomberg News has previously reported. The iPhone 8 is still on the market, currently selling for $449, whereas Apple sold the iPhone SE for $399 when that handset launched in 2016.The new phone is expected to have Touch ID built into the home button, reusing established Apple technology instead of opting for an in-display fingerprint sensor like most modern Android rivals. It will not have Apple’s Face ID biometric authentication, but it will feature the same processor as Apple’s current flagship device, the iPhone 11.An Apple spokeswoman declined to comment.Apple Expects IPhone Shipments to Return to Growth in 2020Apple’s more affordable iPhones have proven popular with consumers, including the latest iPhone 11, whose starting price was $50 lower than Apple’s typical pricing. Strong demand for iPhones has prompted Apple to ask Taiwan Semiconductor Manufacturing Co. to make more chips in the current quarter, according to two people familiar with the matter.Shares in Japan Display Inc., which supplies LCD screens for Apple’s lower-tier iPhones, closed 1.35% higher on Wednesday.Apple is planning a slew of new high-end iPhones for release later in 2020 that include 5G connectivity, faster processors, and new 3-D cameras on the back, Bloomberg News has reported.A cheaper offering may help Apple better compete in the most price-competitive and fast-growing emerging phone markets, particularly India. iPhones are still a hard sell in the country, which is overrun by aggressively-priced Android rivals coming in at less than $200. Still, Apple has shown a will to carve out a niche for itself and is eyeing locations for Apple stores within its borders.The U.S. tech juggernaut is hoping its handset shipments will return to growth this year, having set itself the goal of shipping more than 200 million units in 2020. The successor to the iPhone SE will play a significant role in that task.(Updates with Japan Display share price move)To contact the reporters on this story: Debby Wu in Taipei at dwu278@bloomberg.net;Mark Gurman in Los Angeles at mgurman1@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Apple Is Raising TSMC Chip Orders to Meet Strong iPhone Demand

    Apple Is Raising TSMC Chip Orders to Meet Strong iPhone Demand

    (Bloomberg) -- Apple Inc. has asked chipmaking partner Taiwan Semiconductor Manufacturing Co. to increase its output of A-series processors this quarter in order to satisfy higher-than-anticipated iPhone demand, people familiar with the company’s plans said.The iPhone 11 and 11 Pro models were well received on their debut in the fall and their sales in China have been particularly strong, outselling 2018’s releases in a market that has otherwise been shrinking. Even without fifth-generation wireless networking, iPhone demand has been outperforming the market and Apple’s expectations, and the company asked assembly partners to increase their production of the latest generation.The most affordable iPhone 11 model, equipped with an LCD screen, was a particular driver for the increased demand, one person said.New Low-Cost IPhone Said to Enter Mass Production in FebruaryAlong with the popularity of existing models, Apple’s business with TSMC is also set for a boost from an imminent iPhone SE successor, a low-cost model that will begin mass production in February ahead of an official unveiling as soon as March, Bloomberg News reported. It will be built around the same processor as the iPhone 11 generation.TSMC spokeswoman Nina Kao said the company doesn’t comment on its business with any specific customer. An Apple spokeswoman declined to comment.The Taiwanese chipmaker recently reported earnings above most analysts’ expectations and it forecast another good quarter ahead. Though it faces potential headwinds from the threat of tightening U.S. sanctions on key customer Huawei Technologies Co., analysts believe additional demand from Apple and Advanced Micro Devices Inc. will replace any potential Huawei drop-off.\--With assistance from Mark Gurman.To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.