TSMC Posts Record Quarterly Sales Ahead of New Devices

Taiwan Semiconductor Manufacturing Co. posted record quarterly sales as clients including Apple Inc. prepare for the release of new smartphones and tablets.

Second-quarter sales were NT$183 billion ($6.1 billion) according to Bloomberg calculations based on monthly sales reported today. That’s ahead of the NT$181.4 billion average of 23 analyst estimates compiled by Bloomberg and the top of its own forecast for NT$180 billion to NT$183 billion.

Apple’s suppliers in China this month are starting mass production of the company’s next generation iPhones that will feature larger screens. TSMC in April raised its full-year market outlook and said smartphone demand is healthier than expected even as competition from Globalfoundries Inc. and Semiconductor Manufacturing International Corp. intensifies.

“TSMC’s near-term outlook is much stronger than our expectation,” Sanford C. Bernstein analysts including Hong Kong-based Mark Li wrote in a report today ahead of the sales announcement. “Medium-term, we can’t see the next growth driver after Apple’s business. Long-term, the structural challenges from cost escalation and competition from Intel and Samsung also persist.”

Apple has contracted TSMC to make chips for its devices using the Taiwanese company’s latest 22/20 nanometer production technology, Li wrote in today’s report.

Samsung Electronics, which manufactures chips, phones and TVs, and HTC Corp. both posted revenue for the period that missed analyst estimates amid weakness in their smartphone sales. Samsung said this week it expects a rebound in the smartphone market in the third quarter as it releases new models.

Chip designers such as Broadcom Corp. and Qualcomm Inc. typically order chips three to six months in advance of the release of an end-product.

Second quarter sales were calculated by adding data from April and May to June revenue of NT$60.3 billion released today.

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