TSMC’s sales revenue in February was up by more than 50 percent compared with a year before while revenue at smaller competitor United Microelectronics Corporation was up 30 percent, suggesting that this is more than a TSMC-specific phenomenon.

Fabless ASIC design service company Global Unichip Corp. which has been aligned with TSMC in the past also did well with February sales 19.0 percent compared to the same period in 2019.

Even though these large annual jumps are compared against weak figures recorded in January and February 2019 the foundries showed a considerably increase against the same period in 2018. For example TSMC’s February 2020 sales revenue was 44.5 percent ahead of February 2018.

The boom is not explained by the move of the lunar new year holiday from February in 2019 back into January in 2020. Although, this made for fewer work days in January 2020 than in the year before and more work days in February 2020.  But when taking January and February together TSMC’s sales are up 41.8 percent on the same period in 2019 and UMC’s are up 24.4 percent.

One significant factor could have been stockpiling of chips by Chinese fabless customers in general and Huawei in particular (see Huawei stockpiling chips, expecting tighter US sanctions). This would tend to favour TSMC, with its leading-edge leadership, more than UMC, which is reflected in the data.

TSMC’s February 2020 sales were NT$93.394 billion (about $3.11 billion). This was down sequentially in line with seasonal norms, and up 53.4 percent compared with the weak month that was February 2019.

Next: The year-to-date

For the year to date TSMC’s sales were NT$197.08 (about $6.57 billion) up 41.8 percent compared with the same period a year before.

At UMC sales in February 2020 were NT$13.61 billion (about US$453.57 million) up 30.1 percent compared with a year before. For the year-to-date UMC has recorded sales of NT$27.70 billion (about $923.29 million). This is up 24.4 percent on the weak beginning to 2019.

It now seems inevitable that some push back in foundry orders will occur in subsequent months. Not least that many of China’s manufacturing firms took two weeks to a month off and are only slowly rebuilding capacity. The numbers for March will be waited for with eager anticipation as they may indicate the depth of the new recessionary tendencies in 2020.

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