Last week while the blogosphere and Wall Street overreacted to TSMC slightly revising their annual forecast, Patently Apple dismissed the hysteria and focused on Apple's next iPhone using TSMC's next-gen 7nm processor in a report titled "TSMC Reveals that Smartphones with 7nm Processors on Track for Q4 2018 could bring up to 40% Power Reduction." Today supply chain sources focused on the positives of TSMC's coming processors.

The report notes that "Taiwan Semiconductor Manufacturing Company (TSMC) is likely to score record profits for 2018 as the company will be gradually ramping up volume production of 7nm process in the second half of the year to fulfill lucrative orders from Apple for fabricating A12 application processors for its 2018 new iPhone models and from Qualcomm for processing its new-generation smartphone chips, according to industry sources."

The sources further stated that "TSMC will see its revenue ratio for advanced 7nm process hit a high of 20% in 2018, and may therefore post better-than-projected revenues and profits for the second half of the year and register an annual revenue growth of over 10%."

This is despite TSMC having lowered its revenue growth forecast for 2018 to 10% from the earlier projection of 10-15%, citing weaker-than-expected smartphone demand in the second quarter and growing uncertainty facing the cryptocurrency mining market.

Wall Street and others last week assumed that the slightly lower forecast was squarely on Apple whereas in today's supply chain report we learn that it's likely  MediaTek that dropped the ball, not Apple.

The report noted that "Supply chain sources cited MediaTek's lackluster performance in capturing orders for its latest AI-based Helio P60 SoCs from China smartphone vendors in the second quarter as another factor driving TSMC to revise downward its revenue growth projections for the year.

Today's supply chain report provides us with a calmer outlook on TSMC's annual forecast with positives from their coming 7nm processors due to Apple orders. The report further shifted the negativity to MediaTek as the likely company that drove TSMC to revise their forecast last week.

Something tells me that brokers, using last week's information about TSMC, blindly raced to judgement pointing fingers at Apple out of ignorance. I'm sure they won't be making any revisions to their notes on the new information to clients as it would make them look schizophrenic.

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