Chipmakers’ rout widens after TSMC ignites smartphone fears

Bloomberg

Asian technology stocks joined their peers in a global swoon after a disappointing sales outlook from Taiwan Semiconductor Manufacturing Co., Apple Inc.’s main chip supplier, rekindled concerns that the smartphone industry’s best days may be behind it.
TSMC fell 6 percent — its biggest loss since July 2013 — after predicting current-quarter sales about a billion dollars less than analysts had projected. It also reduced its forecast for semiconductor market growth, to 5 percent from a previous 5 to 7 percent. That followed a report by the International Monetary Fund this week saying smartphone shipments declined for the first time, a reminder that the industry may have peaked.
The Taiwanese company, an industry bellwether whose clients include Qualcomm Inc. and Nvidia Corp., triggered a selloff in chipmakers and tech stocks from Europe to Asia. As the main manufacturer of Apple’s processors, its tepid revenue forecast also revived fears that the iPhone X may already be losing momentum a quarter after its release.
In Korea, Samsung Electronics Co. fell 2.2 percent while SK Hynix ended 4 percent lower. Shares of Japanese semiconductor equipment and silicon wafer makers, including Tokyo Electron Ltd. and Alps Electric Co., also fell. Their Chinese peers held up better, rallied strongly on hopes Beijing will prop up the industry as its relationship with Washington sours.
“TSMC still seems to be relatively positive about cryptocurrency mining in the second half though it sees some weakness in the segment in the second quarter, so it appears that it is weakness in demand for iPhones that led to TSMC cutting its full-year forecast,” said Vincent Chen, head of regional research for Yuanta Securities Investment Consulting. “The global semiconductor rout came because TSMC not only trimmed its 2018 growth, but also slashed its forecast for the overall semiconductor market.”