Taiwan Semiconductor Manufacturing Company (TSMC) is set to tape out more than 50 chip designs with its 7nm process technology by the end of 2018, and over 100 chip designs with both its 7nm and enhanced 7nm with EUV nodes by the end of 2019, according to the pure-play foundry.

TSMC expects 7nm chip sales to account for more than 20% of its total wafer revenues in the fourth quarter of 2018, and nearly 10% in all of the year. The proportion will likely exceed 20% in 2019, when the foundry expands its 7nm process portfolio to include an enhanced version with EUV, said company CEO CC Wei at an October 18 investors meeting.

TSMC is scheduled to move EUV-based 7nm process node to mass production in 2020, Wei indicated. The majority of TSMC's 7nm chip output for 2019 will still be built using its first-generation 7nm process, Wei added.

Apple, Huawei and Qualcomm will be TSMC's main handset chip customers adopting the foundry's 7nm process technology, while AMD, Nvidia, Xilinx and a number of AI chip developers are other major clients of TSMC's 7nm process, according to market observers. The observers believe TSMC's competitive 7nm node manufacturing will be driving the foundry's revenue growth in 2019, thanks mainly to orders from Apple, Huawei and AMD. Meanwhile, Qualcomm is set to return to TSMC for its high-end Snapdragon 800 series mobile SoCs next year, the observers continued.

In addition, TSMC has revised downward its revenue growth forecast (in US dollar term) for 2018 to 6.5% from the 7-9% estimated previously, due mainly to a further weakening of cryptocurrency mining demand.

TSMC expects to post revenues of between US$9.35 billion and US$9.45 billion in the fourth quarter, up 10-11% sequentially. The company attributed its less-optimistic outlook for the quarter to mainly falling utilization rates for 28nm and other mature process nodes. "Our business will continue to benefit from the strong demand for our 7-nanometer technology," said company CFO Lora Ho.

TSMC is reportedly the exclusive supplier of Apple's A12 SoCs for use in the new iPhones.

TSMC disclosed its 28nm process utilization rate has fallen below 90%, while its 7nm process is running at full utilization. The global supply of 28nm chips has already exceeded demand, which the foundry believes is "an industry-wide phenomenon" which is expected to persist for a few years.

Looking into 2019, TSMC expects sales generated from all its target applications - smartphones, HPC, IoT and automotive electronics - to increase with the IoT and auto sectors likely to register double-digit increases. The foundry will also be enhancing its 22nm process offering to help fill its 28nm production capacity.