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Bloomberg
Taiwan Semiconductor Manufacturing Co. forecast quarterly revenue that trailed estimates, dashing hopes that Apple Inc.’s iPhone will help the world’s largest contract chipmaker pull out of a smartphone industry slump and avert the impact of a strong currency.
The Taiwanese maker of the iPhone’s processors forecast third-quarter sales of $8.12 billion to $8.22 billion, short of the $8.6 billion projected by analysts. That disappointment came after TSMC posted second-quarter profit that also missed, hurt by an industry-wide lull ahead of a 10th-anniversary iPhone — one of the year’s most-anticipated gadgets.
Investors had been counting on a flurry of semiconductor orders ahead of the launch of Apple’s latest device, typically around September or October. The US company is TSMC’s biggest customer, accounting for about 17 percent of revenue, according to data compiled by Bloomberg. At the same time, global smartphone demand is expected to recover in 2017 from last year’s record slump, led by Android phonemakers such as Huawei Technologies Co., a TSMC customer that ranks third in global device sales.
“We expect growth within the Chinese Android camp to be better in the second half, but how much better, that’s the question,†said Peter Chan, an equity analyst with CIMB Securities.
TSMC’s shares slipped as much as 1.3 percent in Germany after the sales forecast. Prior to results, its Taipei stock had gained 18 percent this year and hit a record in June, propelled by hopes of an iPhone bonanza. That in turn helped TSMC founder and Chairman Morris Chang become a billionaire at the age of 86.
TSMC had previously reported a 5.3 percent climb in first-half sales to NT$447.8 billion, but the other forecasts looked soft. It’s predicting gross margins of 48.5 percent to 50.5 percent, versus projections for 50.2 percent. The company is also facing the challenge of a stronger local currency, which erodes the value of overseas sales, and rising competition in chips from Samsung Electronics Co. The South Korean company has been successful at winning business from smartphone makers that rely on Android, the world’s most popular mobile operating system.