Apple is believed to be responsible for 25% of TSMC’s revenue. The company is the world’s largest chip foundry in the world with Samsung Foundry a distant second in terms of market share. TSMC recently reported its December quarter results and also released its March quarter and full year 2023 forecast.
Based on the numbers TSMC forecasts for its smartphone segment (which mostly tracks iPhone sales), and taking into account that the iPhone accounts for half of Apple’s business, Loup Ventures Analyst Gene Munster
says we should expect Apple
to report earnings slightly below consensus forecasts for the March and June quarters.
As for TSMC, the report says it will have a worse first half than Apple as it has already sold its customers the chips they will use in the coming months. But demand will pick up when it starts shipping 3nm chips in the second half of 2023. Apple’s A17 Bionic SoC should be produced using TSMC’s 3nm process node and should be found in the iPhone 15 Pro and iPhone 15 Ultra
. Those two phones may be the only handsets from a major manufacturer to have a 3nm chip this year.
TSMC’s smartphone segment results predict a better second half for the iPhone
TSMC’s smartphone segment growth is on a declining trend. For the September quarter, growth came in at 27% year-on-year and fell to 9% growth for the three months ended December. TSMC’s guidance shows that the smartphone segment could report a 3% year-over-year revenue decline for the March quarter.
Wall Street expects Apple to report a 0.3% decline in iPhone sales for the March quarter, and the analyst says TSMC’s smartphone segment forecast suggests a slight decline in iPhone sales for the same quarter. According to Wall Street’s consensus forecast for the June quarter, iPhone sales are down 1.2% year-over-year, compared to a 13% drop predicted for TSMC’s smartphone segment due to the aforementioned destocking by TSMC customers.
Things are expected to change for the iPhone in the quarter ending September, as Wall Street analysts expect iPhone revenues to increase 3.4% year over year. But Munster calls that forecast conservative in light of TSMC’s expected recovery in the same quarter.
For Apple’s fiscal year 2023, Munster expects iPhone revenue to outperform the consensus forecast of a 0.3% annual decline. For fiscal year 2022, Apple’s iPhone revenue exceeded $200 billion for the first time as the handset grossed $205.5 billion. That was a 7% increase from fiscal year 2021.