TSMC Posts Record 2019 on Bigger Demand for Chips

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Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE:TSM) reported a 15% increase in monthly revenues between November and December 2019 and a 4% increase in yearly revenue, according to filings made Friday with the SEC. 

According to the filings, TSMC posted revenue of $35.7 billion in 2019 and $3.4 billion for December down 4.2% on month but up 15% from a year earlier. The company reported its fourth-quarter revenues to be $10.6 billion, up about 8% sequentially. It's also the first time the company has breached the $10 billion mark for quarterly revenue. This growth beat the company's own forecasts of an increase of 1-3% made in early 2019, as well as a 1-3% growth forecast for the entire pure foundry industry. TSMC is due to report earnings on January 16 to discuss the quarter in depth.

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Looking ahead, the company is expecting 2020 to be a banner year with a 15-20% growth in revenue forecasted on the back of a new 5nm process node and the mass adoption of 5G devices. Earlier in 2019, TSMC announced it is accelerating its spending accordingly, hiked its estimate for 2019 capital expenditure to $14 billion to $15 billion from $11 billion previously.

According to aggregated 13F filings reviewed by Wccftech, asset managers are generally bullish on the company's prospects with approximately 375 funds creating or adding to their current positions. For hedge funds specifically, holdings are up 6.5%. However, there are a number of funds, like Renaissance Technologies, run by noted quant Jim Simmons, who have begun reducing their exposure to the technology sector by selling off the likes of TSMC and Apple (NASDAQ:APPL).

It should be noted that TSMC peers United Microelectronics (UMC) and Vanguard International Semiconductor (VIS) aren't experiencing the same success. According to filings by the respective companies, they both saw a drop of 2% in revenue on-year.

Throughout 2019, Taiwan’s economic growth has outpaced regional peers such as Hong Kong, Singapore, and Korea. Taiwan's stock exchange, the TAIEX, rose 24% in 2019 as foreign investors have moved $6.6 billion into Taiwan-listed equities during the year.