Taiwan Semiconductor Manufacturing Co.
Industryweek 9605 101515tsmc

Taiwanese Chipmaker TSMC Quarterly Profits Drop

Oct. 15, 2015
A weaker global economy, a stronger U.S. dollar and a volatile market for mobile phones and other electronic devices are blamed for the Taiwanese company's 1.3% drop in the third quarter.

TAIPEI — Chipmaking giant Taiwan Semiconductor Manufacturing Co. (TSMC) announced Thursday that its third-quarter profit fell 1.3% compared to the same period a year ago amid sluggish demand for smartphones and computers.

Its net income in the three months through September slipped to Tw$75.33 billion ($2.35 billion), its first earnings decline in three years, according to Bloomberg News.

The world’s biggest contract microchip producer — which is known to be a supplier of Apple — is seeing earnings slip as it vies with regional rivals such as South Korea’s Samsung and Chinese firms in a globally-weakening smartphone and electronics market.

“Due to a weaker global economy, a stronger U.S. dollar environment and a volatile financial market, the electronic device market has been negatively impacted,” co-CEO Mark Liu said. An “unexpected” slowdown in the Chinese economy also dragged on demand, Liu said at an investor conference Thursday.

Liu said the firm expects to see the global smartphone market expand by 10% this year, but forecasts no growth in the semiconductor industry because of a large build-up in inventories.

Revenue in the third quarter was up 1.7% year-on-year to Tw$212.51 billion ($6.63 billion), exceeding an earlier forecast due to a stronger U.S. dollar, the currency in which most of TSMC’s sales are denominated.

The company’s capital expenditure this year would amount to $8 billion, about $3 billion less than earlier expectations, CFO Lora Ho said.

The slash in spending was a surprise, analysts said, indicating concern about the outlook for next year because the cut affects expansion of TSMC’s facilities.

Global smartphone shipments are expected to increase 10.4% this year, significantly slower than the 27.5% growth in 2014, according to technology market researcher IDC. Still, smartphones will continue to “provide momentum” for the next two to three years, especially in terms of the demand for silicon components used in high-end devices, Liu said.

“The high-end smartphones, which provide richer features, higher performance and lower power consumption will continue to drive the demand of leading edge technologies,” he said. “We stand to benefit from this trend.” 

Copyright Agence France-Presse, 2015

Popular Sponsored Recommendations

Your Industry 4.0 Journey

Sept. 24, 2023
When It Comes to Industry 4.0, the Journey is the Destination. Industry 4.0 must be embraced as a long-term, strategic mindset of digital transformation that dynamically alters...

Ecommerce Guide: How to Manage Order Volume Spikes

Oct. 2, 2023
Master the art of delivering a seamless ecommerce shopping experience! Learn how to streamline your operations to successfully manage seasonal sales order spikes.

Lifecycle management for semiconductors. One end-to-end digital solution for today’s evolving ecosystem.

July 11, 2023
Discover the secure end-to-end traceability and digitalization solution for semiconductor lifecycle management. Gain the traceability, real-time visibility of business processes...

Lean Manufacturing in the Age of the Industrial Internet

Oct. 24, 2023
Read how advanced MES capabilities can help you improve your labor utilization, reduce WIP, and optimize your production. Download the white paper today.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!