TSMC announced its third-quarter 2020 financial results on Thursday. According to TSMC’s financial report, the consolidated revenue in the third quarter was approximately NT$356.43 billion (approximately US$12.14 billion), a year-on-year increase of 21.6% and a month-on-month increase of 14.7%, setting a new quarterly revenue record. Net profit in the third quarter was as high as NT$137.3 billion (US$4.78 billion), an increase of 35.9% over the same period last year, with a net profit margin of 38.5%, a gross profit margin of 53.9%, and an operating profit margin of 42.1%.

7nm accounted for the highest revenue, and 5nm contributed 8%

From the perspective of the proportion of revenue contributed by each process, 7nm accounts for up to 35%; 16nm accounts for 18%, the same as the previous quarter; 10nm has contributed zero for two consecutive quarters; mature processes above 16nm account for It fell to 39%; and the latest 5nm process began to contribute revenue for the first time, accounting for 8%. According to the existing information, the main customers of TSMC’s 5nm revenue are Apple and Huawei.

Wei Zhejia, President of TSMC, said that customer demand for 5nm and 4nm chips based on 5nm improvements is very strong. In 2020, the 5nm process revenue will contribute 8% of the total revenue, and the contribution next year will be close to or even more than 20%. At that time, the share of 5nm will be basically the same as that of 7nm.

The smartphone market contributes the highest proportion of revenue

From the perspective of the contribution of each market segment, the smartphone market contributed up to 46% of the revenue, an increase of 12% month-on-month; high-performance computing (HPC) accounted for 37%, a month-on-month increase of 25%; IoT accounted for 9%, an increase of 24% month-on-month; revenue contributed by the automotive and DCE markets both experienced a month-on-month decline of more than 20%.

3nm is expected to mass production in 2022

Regarding the evolution of TSMC’s process, 3nm technology has attracted much industry attention. At this earnings conference, TSMC confirmed that 3nm is expected to enter risky trial production in 2021, and target mass production in the second half of 2022. At the same time, Wei Zhejia predicts that smartphone and high-performance computing customers will be the first to adopt the 3nm process in 2022.

Can you supply mature process products to Huawei?

A few days ago, there are rumors in the industry that TSMC has obtained a license to supply Huawei from the US Department of Commerce, and can supply some mature process products below 28nm to Huawei. In response to this rumor, TSMC previously responded that it “does not respond to unfounded market rumors.”

At this financial report meeting, TSMC President Wei Zhejia once again responded to the relevant rumors about Huawei in the question and answer session. Wei Zhejia made it clear that the company fully complies with laws and regulations, and will not respond to unnecessary speculation, and the status of Huawei’s license application will not be disclosed to the public for the time being.

Regarding the question of whether TSMC will ship to Huawei in the fourth quarter, Wei Zhejia said: “No, because the previous US ban has pointed out that it cannot continue to ship to Huawei after September 15.”