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Taiwan's TSMC Sees Profit Boost From iPhone 7

Taiwan's TSMC Sees Profit Boost From iPhone 7

By Agence France-Presse | Updated: 13 October 2016 16:49 IST

Highlights

TSMC posted a 28.4 percent year-on-year jump in profit
Third-quarter revenue rose 22.5 percent on-year
TSMC has never officially confirmed it is an Apple chip supplier

Apple's new iPhone 7 series gave Taiwan microchip giant Taiwan Semiconductor Manufacturing Co (TSMC) a boost Thursday as the firm announced profits were up by almost a third compared with last year.

The company was also set to benefit from the demise of Samsung's Galaxy Note 7, analysts said, after the South Korean smartphone giant had to halt production after handsets caught fire.

TSMC - the world's biggest contract microchip maker by revenue - posted a 28.4 percent year-on-year jump in profit to TWD 96.76 billion ($3.06 billion) in the three months to September.

That was also up 33.4 percent from the second quarter.

Third-quarter revenue rose 22.5 percent on-year and 17.4 percent on-quarter, respectively, to TWD $260.41 billion (roughly Rs. 54,867 crores), beating the company's own forecasts of TWD $254-$257 billion.

"This strong growth was driven by our major customers' new mobile product launch and a stronger-than-seasonal growth from our other customers," said co-chief executive Mark Liu.

TSMC has never officially confirmed it is an Apple chip supplier but industry watchers said the company produced the A10 chip for the iPhone 7 series that went on sale in September.

Apple has reportedly ordered at least 72 million units of the iPhone 7 series from its Taiwanese suppliers, a significantly higher figure than the 65 million previously predicted by some analysts.

Samsung's Galaxy Note 7 woes also came into play - and could further help TSMC's performance in the fourth quarter.

"TSMC's third quarter performance surpassed expectations as sales for iPhone 7 were better than expected while Samsung's Note 7 recall crisis also affected it," said Mason Li of Taishin Securities Investment Advisory Co.

Li estimated that up to five million additional iPhone series units will be sold in the current quarter as Samsung Note 7 users switch to new smartphones.

"TSMC has a chance to set a record for its fourth quarter earnings in the Galaxy Note 7 aftermath," he said.

Samsung started to recall millions of its Galaxy Note 7 smartphones in early September after several devices exploded or caught fire. The company said Tuesday it was scrapping production of Galaxy Note 7, following reports that replacements for combustible models were also catching fire.

Looking ahead, TSMC forecast fourth-quarter revenue to be around TWD $255-$258, saying demand for high-end smartphones would continue to improve.

It also estimated overall 10 percent revenue growth for 2016.

TSMC had seen its profits slip in the first six months as it vied with regional rivals such as Samsung and Chinese firms for a greater share of a weakening smartphone and electronics market.

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REVIEW
KEY SPECS
NEWS
Variants

Design
Display
Software
Performance
Battery Life
Camera
Value for Money

Good
Best-in-class performance
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Improved cameras
iOS 10, timely updates

Bad
Low light camera performance not best in class

Read detailed Apple iPhone 7 review

Display 4.70-inch

Processor Apple A10 Fusion

Front Camera 7-megapixel

Rear Camera 12-megapixel

RAM 2GB

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Battery Capacity 1960mAh

OS iOS 10

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Apple iPhone 7 Plus

REVIEW
KEY SPECS
NEWS
Variants

Design
Display
Software
Performance
Battery Life
Camera
Value for Money

Good
Great performance
Dual camera
Excellent battery life
Improved cameras
iOS 10, timely updates

Bad
Low light camera performance not best in class
Expensive
Ungainly

Read detailed Apple iPhone 7 Plus review

Display 5.50-inch

Processor Apple A10 Fusion

Front Camera 7-megapixel

Rear Camera 12-megapixel

RAM 3GB

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Battery Capacity 2900mAh

OS iOS 10

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