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TSMC revenue jumps 50% in November, helped by Apple iPhone orders

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TSMC has bucked a slowdown in areas of the chip market within the face of rising prices, fears of a worldwide recession and Covid disruptions in China.

Rafael Henrique | Sopa Images | Lightrocket | Getty Images

TSMC, the world’s largest contract chipmaker, on Friday reported a surge in revenue in November thanks partly to orders of semiconductors for high-end smartphones similar to Apple’s iPhone.

The Taiwanese firm, which makes chips for other firms, said November revenue totaled 222.71 billion recent Taiwan dollars ($7.27 billion), a 50.2% year-over-year rise.

TSMC makes chips for a big selection of firms, including the most recent semiconductors for Apple and Qualcomm in addition to SoftBank-owned Arm. The corporate has bucked a slowdown in areas of the chip market within the face of rising prices, fears of a worldwide recession and Covid disruptions in China.

The November revenue report puts TSMC on the right track to hit its previously stated fourth quarter guidance of between $19.9 billion and $20.7 billion. In October and November, TSMC’s revenue totaled around $14.1 billion.

“TSMC’s Oct/Nov revenues are on the right track comparing to what the management guided 2 months ago, despite significant business slowdowns in lots of other semi names,” Dale Gai, semiconductor analyst at Counterpoint Research, told CNBC via email.

Gai said “high-end smartphones” similar to the A16 chip for Apple’s iPhone and the most recent semiconductor from Qualcomm contributed to the “majority of its (TSMC’s) seasonal strength.”

The analyst said some chips for so-called high-performance computing also contributed to the strong set of numbers.

TSMC is arguably the the world’s most vital semiconductor manufacturer. It has an enormous set of clients that depend on it for probably the most cutting-edge chips.

It has also been caught up in the course of the U.S.-China tech battle over chips. The USA has sought to chop China off from critical chips and tools while attempting to reshore semiconductor production.

Earlier this week, TSMC announced the opening of a second chip plant in Arizona, upping its investment within the state from $12 billion to $40 billion. President Joe Biden was on the event where the investment was announced, underscoring the critical role that TSMC will play within the American semiconductor sector.

Apple CEO Tim Cook also attended the event and said the iPhone maker would buy TSMC’s U.S.-made chips.

While TSMC’s November revenue is getting a lift from Apple, analysts are nervous about weaker orders next 12 months.

“The true test for the corporate can be” in the primary half of 2023, said Sze Ho Ng, analyst at investment bank China Renaissance.

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