39.28 -0.29 (-0.73%)
Pre-market: 4:54AM EDT
|Bid||0.00 x 1800|
|Ask||44.00 x 4000|
|Day's range||39.18 - 40.09|
|52-week range||35.35 - 46.57|
|Beta (3Y Monthly)||0.91|
|PE ratio (TTM)||17.70|
|Forward dividend & yield||1.35 (3.39%)|
|1y target est||48.36|
TSMC, which is also struggling with a slowdown in cryptocurrency mining demand, is expecting sales of $9.35 billion to $9.45 billion this quarter, lagging the $9.55 billion average estimate. For 2019, Taiwan’s largest company also foresees a possible bump in spending -- key to retaining its technological edge -- to as much as $12 billion. While TSMC remains the exclusive maker of iPhone processors, it’s tackling a smartphone market that’s seeing little growth as customers take longer to replace devices and brands fail to create innovative designs.
One downside is to profitability, as the high costs of a new manufacturing technology generally hit gross margin. TSMC doesn’t like to talk about clients, but Apple Inc. is a primary customer. This quick adoption of its newer technology lends support to TSMC’s strategy of spending big to remain at the bleeding edge, even when that means annual capex budgets surpass $10 billion.
In the previous part of this series, we saw that Intel’s (INTC) delay in the launch of the 10 nm (nanometer) node could put it behind rival Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Co. (or TSMC) (TSM) in terms of technology. For years, Intel has been the leader in the manufacturing technology node. It was this technological advantage that helped Intel gain market share and command a high price for its products.
In the previous part of this series, we saw that Intel (INTC) launched it ninth-generation Core processors even though it’s facing yield issues on its 10 nm (nanometer) node. Intel has already delayed the launch of its 10 nm products from the 2016 holiday season to the 2019 holiday season, allowing rivals Taiwan Semiconductor Manufacturing (or TSMC) (TSM) and Samsung (SSNLF) to go ahead of it in terms of manufacturing technology. With the 7 nm node, AMD has tweaked its strategy and is bringing server CPUs first, which could be followed by client CPUs. On the other hand, Intel could launch its client CPUs first and then server CPUs, although the gap between the two launches would be short due to delays in the 10 nm node.
Intel’s (INTC) gross margin is influenced by unit volumes, ASP (average selling price), and the resultant product mix. Gross margin is also dependent on production cost. According to Moore’s law, every node shrink would improve performance and reduce cost.
Taiwan Semi's (TSM) third-quarter results are likely to benefit from 7 NM technology ramp-up. However, weakening cryptocurrency prices remain overhangs.
The second round of 10% tariffs on $200 million in Chinese (FXI) goods, which went into effect on September 24, includes GPUs (graphics processing units). These tariffs could rise to 25% effective January 1, 2019, if no negotiations are resolved between the United States and China.
Intel (INTC) stock started falling in June when the company’s then-CEO Brian Krzanich told a Wall Street analyst that the company might lose some server CPU (central processing unit) market share to Advanced Micro Devices (AMD). After this news, investors became sensitive to any negative news on Intel. Analysts are becoming bearish on Intel, with 59% recommending “buy” in August and 46% recommending “buy” in September.
Previously in this series, we saw that PC vendors are increasingly adopting Advanced Micro Devices’ (AMD) second-generation Ryzen CPUs (central processing units) due to the supply shortage of Intel’s (INTC) CPUs, which could bring AMD gains. However, these gains could be short lived if Intel launches its rumored ninth-generation CPUs in Q4 2018 and its 10nm (nanometer) Cannon Lake CPUs in Q4 2019, as AMD’s CPUs still lag behind Intel’s in terms of performance. As AMD is aware of its competition, it is changing its foundry strategy significantly.
Anyone with the foresight to short Tencent Holdings Ltd.’s shares while going long Taiwan Semiconductor Manufacturing Co. could have made as much as 54 percent in the three months through September. Tencent is struggling to bounce back from this year’s lows after China got stricter on online games, the latest in a string of bad news that included the company’s first profit drop in at least a decade. Meanwhile, investors flocked to TSMC after a U.S. competitor quit trying to develop the most advanced chip production technology, paving the way for Taiwan’s biggest company to solidify its dominance of the market.
Intel (INTC) is a leader in the PC CPU (central processing unit) market, with an ~80% market share. Its only other rival in the market is Advanced Micro Devices (AMD). Intel’s 14nm (nanometer) node supply constraints opened a window of opportunity for AMD to sell its CPUs to more consumers and increase its market share, as it did during the GPU (graphics processing unit) shortage. AMD could increase its market share by offering competitive 12nm Ryzen CPUs (which compete with Intel’s CPUs in terms of price-to-performance metrics) and its transition to TSMC’s (TSM) 7nm node in 2019.
ANSYS (ANSS) in collaboration with Taiwan Semiconductor unveils Automotive Reliability Guide 2.0. ANSYS also formed new alliance with Granta Design.
Intel (INTC) is looking to address the CPU (central processing unit) supply shortage by adding capacity and prioritizing high-margin Xeon server CPUs over PC CPUs. This shortage also fueled rumors about possible approaches Intel could take to meet CPU demand in the short term. Tom’s Hardware, citing multiple sources, reported that Intel is not outsourcing production to TSMC (TSM) but is moving production of its H310C chipset back to the 22nm (nanometer) node.
Intel (INTC) has recently acknowledged that it has fallen short of providing ten-nm (nanometer) PC CPUs (central processing unit) due to a delay in production and rising CPU demand. PC shipments also reported solid growth in second-quarter 2018 for the first time in six years, according to independent research firms Gartner and International Data Corporation (or IDC). Intel’s supply shortage of its ten-nm Intel PC CPUs has pressured the output of its 14-nm chips.
So far, we’ve discussed how 14nm (nanometer) supply constraints at Intel (INTC) have forced several PC vendors to cut their shipment forecast for Q4 2018. JPMorgan Chase expects global PC shipments to fall 5%–7% in Q4 2018. The widespread impact of the CPU (central processing unit) supply shortage has called for urgent measures from Intel. The chipmaker has prioritized its Xeon server CPU and its latest eighth-generation U-Series and Y-Series Core CPUs.
Intel’s (INTC) CPU (central processing unit) shortages have ignited rumors that the company might consider outsourcing some of its CPU production to TSMC (TSM), its rival in the foundry business.
Intel (INTC) is facing supply constraints for its 14nm (nanometer) chips as the company transitions to the 10nm node. The company is believed to have replaced some of its 14nm production lines with 10nm, but poor yields forced the company to delay the launch of 10nm products to the 2019 holiday season. Some analysts stated that the delay in the launch of 10nm products shifted the demand for the 14nm products, which created a supply shortage.
The demand is high in the PC and server markets, and the CPU (central processing unit) market leader Intel (INTC) has been unable to meet this growing demand due to capacity constraints. As a result, a window of opportunity has opened for rival Advanced Micro Devices (AMD) to gain market share and see better-than-expected earnings. Although its products have delivered better price-to-performance metrics, Intel still offers some of the highest-performing CPUs.
The production of TSMC (TSM), Apple’s (AAPL) sole foundry, was affected for four days due to a computer virus outbreak. This could probably be one of the reasons for a one-month delay in the launch of iPhone XR. DigiTimes, citing Apple supply chain sources, stated that shipments of new iPhones are expected to hit 70 million to 75 million units by the end of 2018, its highest since the iPhone 6 launch in 2014.
So far in this series, we’ve looked at Apple’s (AAPL) component suppliers. Apple is manufacturing its A12 processors that would power its 2018 iPhone models on TSMC’s (TSM) 7-nm (nanometer) node. TSMC is Apple’s sole foundry partner and has exposure to Apple in areas other than the A12 processors. For instance, it manufactures modems Intel (INTC) designed for use in iPhones.
The US tariffs on Chinese imports don’t appear to impact Apple’s (AAPL) iPhones. Apple is currently being investigated by the Korean Ministry of Trade, Industry, and Energy (or MOTIE) for infringing on a patent owned by the Korea Advanced Institute of Science and Technology (or KAIST).