TSMC to add 3,000 engineers, sees growth with 7nm logic and 5G chips

TSMC is hiring 3,000 engineers and scientists for three foundries in Taiwan and expects $9B in 3Q revenues. (TSMC)

Taiwan-based TSMC, the world’s largest independent semiconductor foundry, recently announced revenues of $7.75 billion in the second quarter, then followed up on Friday with news it is hiring 3,000 workers with backgrounds in engineering and science.

The company is already producing 7-nm logic technology and is working on developing 5 nm and 3 nm technology. Applications for its products include 5G wireless, AI, IoT and automotive. 

TSMC reported July 18 that its second quarter revenues were down 1.4% year-over-year while net income was down by 7.6%. Shipments of 7-nanometer were 21% of total wafer revenue, while 10 nm contributed 3% and 16-nm accounted for 23%.

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“Our business continued to be impacted by the soft overall global economic condition, customer inventory management and high-end mobile seasonality,” said Lora Ho, chief financial officer of TSMC. “But we have passed the bottom of the cycle of our business and began to see demand increases.”

The company expects revenues to jump to more than $9.1 billion in the third quarter because of accelerated 5G deployment, the use of 7 nm logic for high performance computing applications and new product launches of premium smartphones.

The company had about 48,000 workers at the end of 2017 when it manufactured nearly 10,000 products for 465 customers, according to its website. TSMC does not design, manufacture or market any semiconductor products under its own name, which is one reason it is not on the radar of many U.S. consumers. 

By being situated in Taiwan, many OEMs such as Apple may be able to continue to buy chips from TSCM without the threat of facing tariffs or blacklistings brought by the U.S. against some China-based companies such as Huawei.

Apple accounts for about one-fifth of its revenue, according to Bloomberg and Seeking Alpha. “Recent weakness in Apple’s iPhone sales has caused Apple to cut its chip orders,” Ploutos Investing wrote in Seeking Alpha recently. “Although TSMC is currently the sole supplier of Apple’s A-series chips, Apple may choose to source it’s a-series chips to another supplier such as Samsung to reduce its reliance on one supplier.”

Because TSMC is so large it has the cash to continue making capital investments, more than $10 billion a year. “Over the past few decades, TSMC has established itself as the leading dedicated foundry in semiconductor manufacturing,” Ploutus said. “This gives it a huge advantage over its peers.”

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