(Bloomberg) — Taiwan Semiconductor Manufacturing Co. forecast revenue growth of roughly 30% this quarter, suggesting the chipmaker to Apple Inc. and Huawei Technologies Co. is confident of resilient demand for advanced semiconductors during a pandemic-induced downturn.The world’s largest contract chipmaker expects revenue of between $10.1 billion and $10.4 billion from April to June, at a time Covid-19 is spreading across the globe. That forecast followed a near-doubling of net income to NT$116.99 billion ($3.9 billion) for the three months ended March, when demand for advanced silicon remained steady during the pandemic.The robust results from TSMC, a barometer for the tech industry thanks to its heft and place in the supply chain, underscore resilient demand for the semiconductors in datacenters that are hosting an unprecedented surge in online activity globally. Taiwan’s largest company commands a growing position in the production of the high-end chips needed in server capacity for everything from gaming to video streaming. The company also makes semiconductors for laptops, phones and other devices that people are buying for home offices.TSMC’s revenue rose 42% in the first quarter to NT$310.6 billion, based on previously reported monthly numbers. That’s despite top customer Apple Inc. withdrawing its revenue outlook for the current quarter because of work slowdowns and lower demand in China, its biggest international market. On Thursday, the company reported revenue from smartphones slid 9%. But official data showed iPhone shipments in China jumped 19% in March, suggesting demand was bouncing back in the world’s top smartphone arena, at least compared with the previous-generation iPhone.The company spent more than $6 billion on production upgrades and technology during the quarter, surpassing its fourth-quarter tally. On Thursday, executives said they were ear-marking $15 billion to $16 billion for capital spending in 2020, up from last year’s $14.9 billion.Follow our live blog on earnings here.In the longer term, TSMC like other corporations will have to contend with global economic turmoil and fallout from the U.S.-China trade war. Worldwide shipments of smartphones, a major growth driver for TSMC, are expected to decline 2.3% to 1.3 billion units in 2020 as the Covid-19 outbreak spreads, according to research firm IDC.Washington is said to be considering curbs on TSMC’s sales to Huawei, which relies on the chipmaker to produce its most advanced silicon. China’s biggest tech company, which the U.S. accuses of aiding Beijing in espionage, accounts for about 10% of the Taiwanese chipmaker’s revenue. TSMC Chairman Mark Liu has downplayed the risk to its business, saying growth will still come from a global 5G roll-out.The company is likely to cut its 2020 sales outlook to reflect competition from Samsung Electronics Co. in contract chipmaking and potentially stricter U.S. licensing requirements, Credit Suisse analysts Randy Abrams and Haas Liu wrote April 13. TSMC said in January revenue would grow more than 17% this year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
