Wells Fargo: TSMC news a ‘qualitatively positive Apple data point’

October 18, 2018 by Steven M. Peters

Apple and Huawei were the first to snap up TSMC’s 7nm chips, which are ramping faster.

 

From a note to clients by analyst Aaron Rakers that landed on my desktop Thursday:

The Apple Derivative Call (Positive Qualitative Commentary; Low Historical Correlation): We would expect investors to gauge TSMC’s 7nm ramp as a qualitatively positive Apple data point. Implied 7nm revenue ramping slightly faster than 10nm. Additionally, TSMC’s communications segment revenue grew 24% q/q vs. +14% q/q in 3Q17; albeit up only 2% y/y; however, we note that we would find a somewhat low historical correlation between TSMC’s communications segment revenue and Apple’s results (R2 at <50%). Bloomberg reports that Apple accounts for ~15%-20% of TSMC’s total revenue…

TSMC reported 7nm revenue at $933 million, or equating to approximately 11% of total wafer revenue. TSMC commenced 7nm production in 2Q18, which accounted for less than 1% of total wafer revenue in the June quarter. [See chart]

TSMC 7nm

Click to enlarge.

My take: Intel failure to deliver what it calls its “next generation” 10nm chip looks worse and worse. The poor suffering MacBook.

Who else besides Apple is rolling its own SoCs (system-on-a-chip)? Counterpoint on Tuesday posted an up-to-date backgrounder. See The Rise of In-House Application Processor Design.

Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.