- In addition to slightly beating Q3 estimates, TSMC (NYSE:TSM) is guiding for Q4 revenue of NT$217B-$220B ($7.22B-$7.33B), above a $6.96B consensus.
- Strong Apple orders appear responsible for the Q4 outlook: TSMC expects chips using its cutting-edge 20nm processes to account for over 20% of Q4 wafer revenue, up from 9% in Q3.
- For now, 20nm sales are heavily tied to shipments of Apple's A8 CPU, which is used in the iPhone 6/6 Plus and is believed to be in next-gen iPad models (to be unveiled today). Bloomberg reports TSMC has also landed orders for Apple's A8X CPU, expected to go into a 12.9" iPad. On the other hand, Samsung is believed to be the supplier for the 14nm A9 CPU, expected in next year's iPhones/iPads.
- Q3 gross margin was 50.5%, at the high end of a 48.5%-50.5% guidance range. However, GM is expected to fall to 48%-50% in Q4.
- TSMC's mainstay 28nm processes made up 34% of wafer revenue, down slightly from Q2's 37%. Qualcomm, MediaTek, and other mobile processor vendors rely heavily on TSMC's 28nm offerings.
- Also: TSMC now expects its 16nm FinFET process to reach mass-production in Q2; it previously forecast Q3. The process will square off against 14nm offerings from Samsung and Globalfoundries; Apple's A9 CPU is expected to use Samsung's 14nm process.
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Q3 results, PR