Taiwan Semiconductor Manufacturing Co Ltd (TSMC) expects a boom in the cryptocurrency market to drive up demand for high-end chips and help it post a record revenue this year, outweighing softening sales to smartphone vendors. TSMC's outlook highlights a trend of chip makers benefiting from new technology, such as blockchain, cloud computing, self-driving cars and artificial intelligence, that require powerful processing power and low energy-consumption. Cryptocurrency is the latest entry on this list of revenue drivers.
"The urge to mine cryptocurrency is very strong, and the incentive of course depends on the price of cryptocurrency," TSMC Chairman Morris Chang said at an earnings conference on Thursday, after the company earlier reported a better-than-expected quarterly profit. TSMC expects revenue to grow between 10-15 percent this year, versus a modest 3.1-percent growth in 2017, after factoring in flat demand from mobile customers.
TSMC, which is a key supplier for Apple, Qualcomm Inc and Nvidia Corp, posted a net profit of T$99.29 billion ($3.36 billion) for the quarter ended December, just 0.9 percent less than a year ago. But this was slightly ahead of an average forecast of T$97.78 billion drawn from 20 analysts polled by Thomson Reuters I/B/E/S. Revenue rose to $9.2 billion, in line with the company's guidance and up 5.9 percent from a year ago.
Revenue at TSMC's computer segment surged 25 percent in the quarter, while its communications business, which generates nearly 60 percent of the company's total sales, logged a 2 percent decline. High performance computing will register the strongest growth this year, thanks to demand for graphics chips and high-performance chips used to mine cryptocurrencies, said co-CEO Mark Liu who is set to take over from retiring Chang in June as chairman.
Cryptocurrencies are digital currencies that use encryption techniques for security and can be traded. Mining consumes large quantities of energy and needs chips with a lot of processing power to solve complex math puzzles to validate transactions. TSMC's market value increased by 38 percent over the past year to $212 billion, partly due to the cryptocurrency wave.
For the current quarter, usually a slower period for the tech sector, TSMC sees revenue at $8.4 billion to $8.5 billion.
Comments
Comments are closed.