TSMC and ASML Present Sound 2H20 Sales Guidance

The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.

 

TSMC and ASML have presented sound 2H20 sales guidance thanks to rising demand for 5G smartphones. Domestic memory makers’ share price momentum, which has been lacking of late compared to the global semiconductor industry, is also expected to strengthen in the future.

TSMC raises sales guidance for 2020

TSMC and ASML, which are currently leading global semiconductor industry trends, offered sound outlooks for the semiconductor market in 2H20. Despite the Covid-19 outbreak and Huawei sanctions by the US government, TSMC set 2020 sales growth guidance of +20% y-y or higher (vs its previous outlook in the high teens). The firm’s 2020 capex plan has also been upgraded from US$15~16bn to US$16~17bn. In addition, it is positive that TSMC believes that y-y growth in 2H20 will be greater than in 1H20.

The biggest factor in the foundry industry going into 2H20 is the strong momentum of 5G smartphones such as Apple’s iPhone 12. TSMC also explained that strengthening 5G smartphone momentum and strong demand for high-performance computers are the main reasons for the upward adjustment to its sales guidance. The company said that its 2020 capex upgrade is due to better-than-expected demand for 5nm processes that began mass production in 2Q20. Apple is the largest consumer of TSMC’s 5nm process.

ASML to ship 35 EUV lithography machines in 2020

ASML stands by the 2020 sales figure it offered at the start of the year (before Covid-19 outbreak). By application, the company forecasts flat y-y sales growth for logic equipment and 30% y-y sales growth for memory equipment. ASML mentioned that the memory industry is recovering from a downturn. Memory lithography equipment utilization has been increasing of late. As for logic semiconductors, the 7nm process is becoming the mainstream process and 5nm momentum is spreading.

The company maintains its shipment forecast for EUV equipment (35 units) in 2020, stating that EUV lithography equipment is entering the mass production era. EUV shipments are expected to increase to 45~50 units in 2021. The firm’s 3Q20 sales guidance was presented at EUR3.7bn (+11% q-q).

 

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