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TSMC Credits Apple for 14% Year-on-Year Q4 2020 Revenue Increase

TSMC Credits Apple for 14% Year-on-Year Q4 2020 Revenue Increase

Apple chipmaking partner TSMC is crediting Apple and supercomputers for its 14% year-on-year increase in its fourth-quarter 2020 revenues.

TSMC released its latest earnings report this morning.

“Our fourth quarter business was supported by strong demand for our industry-leading 5-nanometer technology, driven by 5G smartphone launches and HPC-related applications,” said Wendell Huang, VP and Chief Financial Officer of TSMC.

The company says that it expects iPhone 12 demand to remain strong across the current quarter, as it expects “milder smartphone seasonality than in recent years.” (It doesn’t expect the usual drop in iPhone demand that traditionally occurs after the holiday season.)

TSMC has also announced major capital investments this year and expects the 2021 capital budget to be between $25 billion USD and $28 billion USD.

As Bloomberg notes, this is dramatically higher than last year.

Capital spending for 2021 is targeted at $25 billion to $28 billion, compared with $17.2 billion the previous year. About 80% of the outlay will be devoted to advanced processor technologies, suggesting TSMC anticipates a surge in business for cutting-edge chipmaking

[…]

The sheer scale of TSMC’s envisioned budget – more than half its projected revenue for the year – underscores TSMC’s determination to maintain its dominance and supply its biggest American clients from Apple Inc. to Qualcomm Inc. At 52% of projected 2021 revenue, the chipmaker’s planned spending would be the sixth-highest among all companies with a value of more than $10 billion, according to data compiled by Bloomberg. The outlay may also ramp up pressure on Intel, whose budget for 2020 was roughly $14.5 billion.

TSMC remains the sole supplier of Apple’s A-Series chips, used in many of Apple’s devices. Apple once upon a time split its A-Series chip orders between TSMC and Samsung, TSMC has been Apple’s sole A-Series chip supplier ever since the release of the iPhone 7.

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