TSMC records drop in July sales

Taipei--Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest contract chip maker, reported Thursday that its sales for July fell to a three-month low, but market analysts said the company was likely to show stronger sales the rest of the third quarter as the effects of global inventory adjustments faded.

In July, TSMC's consolidated sales fell 14.9 percent from a month earlier to NT$71.61 billion (US$2.36 billion), which was attributed to inventory adjustments in the global smartphone sector.

The company's July sales were the lowest since April, when the figure stood at NT$56.87 billion, and were also a 6.3 percent decline from a year earlier.

At an investor conference in mid-July, TSMC said in its sales guidance for the July-August period that its consolidated revenue would range between US$8.12 billion and US$8.22 billion, increasing almost 16 percent from the previous quarter.

Analysts said the drop in the company's July sales was due to weak demand for smartphones, in particular in non-Apple phones, which affected TSMC's shipments of chips used in such devices.

In addition, demand for computers and other consumer electronics also remained stagnant in July, dealing another blow to TSMC's sales, analysts said.

However, with the expected launch of new iPhones in September, TSMC's sales are likely to bounce back in August and continue to climb in September to meet the company's third-quarter forecast, analysts said.

TSMC reportedly is supplying the A11 processor for the new iPhones, which is expected to boost third-quarter shipments of the company's chips made on the advanced 10 nanometer process, analysts said.

Mass production of the chips began in the fourth quarter of 2016 and they are expected to account for 10 percent of TSMC's third-quarter sales this year, compared with 1 percent in the second quarter.

In the first seven months of this year, TSMC's consolidated sales totaled NT$519.38 billion, up 3.5 percent from a year earlier.

Meanwhile, United Microelectronics Corp. (UMC, ??), the second largest contract chip maker in Taiwan, posted NT$12.79 billion in consolidated sales for July, down 2.37 percent from a month earlier in reflection of a decline in shipments of chips made on the 28nm process. However, the July figure was 2.34 percent higher than a year earlier.

UMC said its consolidated sales for the first seven months of 2017 totaled NT$87.74 billion, up 4.59 percent year-on-year.

Source: Focus Taiwan News Channel