By Kenan Machado 
 

Taiwan Semiconductor Manufacturing Co. Ltd. Thursday reported a 0.7% year-over-year rise in net income for the fourth quarter, which ended December, citing higher revenue thanks to increasing use of its extremely precise chips used by Apple and others, as well as a more favorable exchange rate.

Net income rose to 99.98 billion new Taiwan dollars (US$3.244 billion) from NT$99.29 billion a year earlier, the world's largest contract maker of semiconductors said on its website.

Revenue rose 4.4% year over year to NT$289.77 billion. In U.S. dollar terms, revenue rose 2% from a year earlier to $9.40 billion.

The revenue increase came largely from customers' increased demand for products using the company's 7-nanometer manufacturing process, the company said. The distance between certain chip components is measured in nanometers.

Additionally, a more favorable foreign-exchange rate in the three months through december helped boost revenue, the company said.

Taiwan Semiconductor said chips made using the 7-nanometer process contributed to 23% of total chip revenue in the fourth quarter, up from 11% in the previous quarter and none a year earlier. Chips using the process made up for 9% of overall chip revenue in the full year of 2018 from none a year earlier.

Apple's iPhone XS and XS Max phones that are powered by the Cupertino, California-based company's A12 Bionic chip, the phone's central processing unit, are built using the 7-nanometer chip manufacturing process. The process allows chip makers to pack more components into a denser design, offering more capabilities. Apple's A12 chip has some 6.9 billion transistors.

Taiwan Semiconductor's operating margin dropped 0.4 percentage points to 37.0% in the quarter ended December from the same period a year earlier. Shares closed up 1.4% at NT$220.50 a share in Taipei on Thursday.

 

-Write to Kenan Machado at kenan.machado@wsj.com

 

(END) Dow Jones Newswires

January 17, 2019 03:02 ET (08:02 GMT)

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