Taiwan’s TSMC chief praises Trump’s US jobs goal as Q4 profit sets record

Taipei: The chief of Taiwan’s TSMC, the world’s largest contract chipmaker and a major Apple Inc supplier, on Thursday praised the goal of US. President-elect Donald Trump to create more jobs in the United States.

“Mr. Trump has said many times he wants to create jobs in the United States, we highly applaud that,” Taiwan Semiconductor Manufacturing Co Ltd Chairman Morris Chang told an investor conference.

Chang said TSMC has created hundreds of thousands of jobs in the United States over the last two to three decades, particularly in chip design — the so-called fabless industry, which sprouted from TSMC’s business model of making chips on a contract basis for other companies.

Chang expected TSMC would continue to create jobs in the United States, where it derives about 65 per cent of its revenue, but downplayed the idea of building a foundry there.

“I do not rule it out but I see a lot of sacrifices that we and our customers will have to make if we do that,” Chang said, pointing to the ease of re-deploying engineers across its factories in Taiwan, particularly during emergencies.

Chang’s comments came as TSMC posted record-busting revenue and net profit for the fourth quarter, exceeding analyst estimates.

Executives also said they did not expect any unusual slowdown the current quarter, a normally slower period for the technology sector, but remained conservative in their outlook.

“It really comes from the seasonality of our customers in the mobile area,” said co-Chief Executive Mark Liu. “We don’t see a major slowdown at all.” TSMC said revenue in the first quarter could fall at least 8.7 per cent from the fourth quarter.

For all of 2017, revenue is likely to grow 5 per cent to 10 per cent in US dollar terms, from the 10.6 per cent gain in 2016, executives said.

In Taiwan dollar terms, revenue rose 12.4 per cent last year.

Capital expenditure this year will be around $10 billion, compared with $10.19 billion in 2016, TSMC said.

The company also estimated profit margins in the fourth quarter would mostly carry into the first quarter.

In the final three months of 2016, net profit rose 37.6 per cent from a year earlier to T$100.2 billion ($3.16 billion), a quarterly record. Revenue rose 28.8 per cent to also set a quarterly record.

The company, which derives more than 60 per cent of revenue from communication applications, including for smartphones, estimated that global smartphone units would grow 6 per cent this year, with more of the gains coming from low-end handsets.