Specifically, the smartphone field, which accounted for 49% of revenue in the first quarter, experienced the largest quarter-on-quarter decline, with a quarter-on-quarter decline of -9%; however, demand for high-performance computing applications increased significantly, accounti

As a barometer of the technology industry, TSMC ’s financial report reveals some forward-looking secrets of the industry.

, the world's largest chip foundry, released its first quarter report yesterday, with strong data. Driven by this news, TSMC has rebounded by about 25% from its low point.

Performance breaks through and is on track

Before the outbreak, TSMC predicted that the global foundry industry is expected to grow by 17% year-on-year in 2020, and the company’s annual revenue growth is set at 24%. However, after the outbreak, TSMC will report financial results The forecast is reduced to 10%.

However, judging from the financial report released, the market is still quite surprised.

company's revenue in the first quarter was US$10.306 billion, a year-on-year increase of 45%, exceeding the performance guidance upper limit of US$10.3 billion; gross profit was US$5.3 billion, a year-on-year increase of 82%; net profit nearly doubled from the same period last year, reaching 39 One hundred million U.S. dollars. In addition, gross profit margin increased by 10.5 percentage points to 51.8% from 41.3% in the same period last year, exceeding the upper limit of performance guidance of 50.5%.

Specifically, the smartphone field, which accounted for 49% of revenue in the first quarter, experienced the largest quarter-on-quarter decline, with a quarter-on-quarter decline of -9%; however, demand for high-performance computing (data centers, cloud computing) applications increased significantly, accounting for 30% of revenue, and the quarter-on-quarter decline reached -9%. The growth rate reached 3%; Internet of Things revenue accounted for 9%, and the month-on-month growth reached 8%; while DCE (Digital Consumer Electronics) digital consumer electronics accounted for only 5%, but the month-on-month revenue growth was the fastest, recording a positive growth of 44%.

This obviously gave a shot in the arm to the market's gloomy semiconductor expectations.

Moreover, according to TSMC 's profit forecast for the next quarter, the company's second-quarter revenue is still expected to be US$10.1-10.4 billion, with a gross profit margin of 50%-52%, indicating that semiconductor demand remains strong.

According to industry insiders, with the global industrial chain being so significantly affected, even a positive growth of 10% (or single digits, such as 8%) is a very impressive result, let alone such a high growth rate. The first quarter reports of

and TSMC peers in the industry are also not pessimistic. Last week, SMIC raised its revenue growth guidance for the first quarter of 2020 from the original 0% to 2% to 6% to 8%; the gross profit margin was raised from the original 21% to 23% to 25% to 27%. %.

cancel the order? It’s not that serious.

As a foundry, the outstanding performance reflects that the semiconductor industry does not seem to be very “bleak”.

TSMC CEO Wei Zhejia also said that the market demand for consumer electronics products such as mobile phones has weakened, but currently TSMC has not seen customers significantly cut orders. Moreover, the more advanced the process capacity is, such as 7nm, 5nm, and 3nm, the scarcer the market, so the demand is correspondingly stronger.

From the perspective of the industry, this is mainly due to the strong bargaining power of TSMC .

From the perspective of product segmentation, in the first quarter of 2020, TSMC 7nm (nm refers to nanometer) process shipments accounted for 35% of wafer sales, 10nm wafers accounted for 0.5%, and 16nm wafers accounted for 19% . Advanced processes (including 16nm and more advanced processes) overall account for 55% of total wafer revenue. Among them, the only players in the 7nm field are TSMC and Samsung, and TSMC is a mass production giant. Coupled with the outbreak of the Korean epidemic, many 7nm process orders similar to Apple, Huawei , AMD , Nvidia have been TSMC took it away.

Industry insiders revealed that TSMC's orders are difficult to arrange, and if the order is cut, it will be difficult to regain the order.

However, Huawei HiSilicon's recent reduction of TSMC 7nm orders has attracted market attention.

But judging from the results, Huawei's reduced orders for 7nm were quickly expanded simultaneously by Nvidia , AMD and other major customers; the cut 5nm process production volume was also quickly taken over by Apple, and Apple also asked to continue Additional production capacity of 10,000 pieces.

The market believes that Huawei has special characteristics and needs to view its substantial order cuts dialectically.

Its decision to cut orders from TSMC was based on a preventive judgment on the sweater war, and the relevant production capacity was also transferred to SMIC . It was not a lack of optimism about market demand.Moreover, Huawei mainly cut orders for mobile phone processors, while its orders for advanced process chips for base stations and other equipment that it commissioned TSMC to manufacture not only did not decrease, but also increased. This is mainly due to the expectations of China's 5G construction.

Semiconductor fever is making a comeback

The first quarter report has been released, and the market's hanging heart has settled down.

From the perspective of TSMC itself, the company is still relatively optimistic about its order expectations for the second quarter. As mentioned above, it expects revenue in the second quarter to increase by 30% year-on-year, indicating that there is no concern about a sharp drop in performance in the first half of the year.

Corresponding to the secondary market, the popularity of the semiconductor sector has also bottomed out quickly. From the initial collective decline to the recent revision of expectations, we have all seen the market’s timely response.

According to yesterday's data, US stocks TSMC rose 5.52%, Nvidia rose 4.94%, and American Super Micro, Qualcomm , etc. followed suit. The semiconductor sector of the Hong Kong stock market strengthened, with Huahong Semiconductor rising by more than 4%, ASM Pacific rising by 2.52%, and Semiconductor Manufacturing International rising by nearly 2%.

It can also be seen from the recent Taiwan Semiconductor Index and Philadelphia Semiconductor Index that the rebound is relatively strong. Among them, the Taiwan Semiconductor Index rebounded to 25%, and the Philadelphia Semiconductor Index rebounded to 33%.

Based on Huawei's shift from TSMC to SMIC , it has also boosted the domestic semiconductor craze. Recently, many A-share semiconductor stocks have experienced considerable rebounds.

Goldman Sachs also issued an article saying that they are optimistic about semiconductors and expect that related companies will receive less negative marketing in terms of revenue and earnings. But Goldman Sachs has a relatively conservative attitude towards smartphones.