Well howdy, pil­grims

Worse-than-ex­pected sec­ondquar­ter guid­ance slams TSMC

The China Post - - LOCAL -

Shares of Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC,

), the world’s largest con­tract chip-maker, came un­der pres­sure Fri­day morn­ing af­ter the com­pany on Thurs­day gave a worse-than-ex­pected sales guid­ance for the sec­ond quar­ter, deal­ers said.

Since TSMC is the most heav­ily weighted stock in the lo­cal mar­ket, its losses af­fected the broader mar­ket dur­ing the ses­sion, they said.

As of 11:06 a.m., shares of TSMC had dropped 2.72 per­cent to NT$143.00 (US$4.58) with 31.16 mil­lion shares chang­ing hands. The semi­con­duc­tor sub-in­dex was down 1.98 per­cent at 120.74 points, while the weighted in­dex on the Tai­wan Stock Ex­change was 0.77 per­cent lower at 9,582.84 points.

“It was not sur­pris­ing that TSMC en­coun­tered sell­ing soon af­ter the mar­ket opened, as in­vestor sen­ti­ment was damp­ened by the cau­tious sec­ond-quar­ter sales fore­cast,” in­vest­ment con­sult­ing firm CMoney an­a­lyst Chen Wei-tai said.

Con­sol­i­dated Sales be­tween NT$204 Bil., NT$207 Bil. in Q2

At an in­vestor con­fer­ence Thurs­day, TSMC pro­jected con­sol­i­dated sales of be­tween NT$204 bil­lion and NT$207 bil­lion for the AprilJune pe­riod, a quar­terly drop of 7-8 per­cent and well be­low the mar­ket fore­cast of a 5 per­cent decline.

Many mar­ket an­a­lysts said TSMC’s worse-than-ex­pected sales fore­cast for the sec­ond quar­ter was based on a cut­back in its or­ders from the U.S.-based in­te­grated cir­cuit designer Qual­comm Inc.

Fur­ther­more, the sec­ond quar­ter is usu­ally a slow sea­son for the global IC in­dus­try, Chen said.

“Not many mo­bile de­vice ven­dors have or will launch new mod- els dur­ing that pe­riod so de­mand for mi­crochips is likely to re­main stag­nant amid in­ven­tory ad­just­ments,” he said.

At the in­vestor con­fer­ence, TSMC said that in­ven­tory ad­just­ments in the global IC busi­ness will end in the sec­ond quar­ter and IC de­mand will pick up in the sec­ond half of the year as smart­phone sales re­cover. There­fore, TSMC said, its sales for the whole of 2015 are likely to show dou­ble-digit growth.

The com­pany, nonethe­less, low­ered its sales growth fore­cast for the global semi­con­duc­tor in­dus­try from 5 per­cent to 4 per­cent, and for the world’s wafer foundry in­dus­try from 12 per­cent to 10 per­cent.

TSMC Fun­da­men­tally

Strong: An­a­lyst

Chen said that TSMC re­mains a fun­da­men­tally strong com­pany and he backed its as­sess­ment that its sales growth would pick up in the sec­ond half of the year af­ter the slow­down in the sec­ond quar­ter.

“But since to­day’s sell­ing dragged TSMC shares be­low the 60-day mov­ing av­er­age of NT$145.00, the stock has be­come tech­ni­cally weaker and may en­counter fur­ther pres­sure in the near term,” he said.

In ad­di­tion, TSMC’s de­ci­sion to cut its 2015 cap­i­tal ex­pen­di­ture bud­get to US$10.5 bil­lion-US$11 bil­lion from US$ 11.5 bil­lionUS$12 bil­lion also hurt shares of semi­con­duc­tor pro­duc­tion eq­uity providers.

Among them, shares of Her­mes Mi­cro­vi­sion Inc. ( ), a lead­ing Tai­wan-based semi­con­duc­tor in­spec­tion tool and equip­ment sup­plier, had fallen 4.57 per­cent to NT$1,775.00 as of 11:06 a.m. TSMC is one of Her­mes’ ma­jor clients.


Da­jia Mazu ( ) pil­grims are seen wait­ing at the Zhen­lan Tem­ple ( ) in this photo taken yes­ter­day. The an­nual Da­jia Mazu pil­grim­age held by the Zhen­lan Tem­ple took off last night. Crowds of pil­grims and pa­rade lead­ers who in­form lo­cals of Mazu’s ar­rival had squeezed into the Zhen­lan Tem­ple square, all the while cre­at­ing a bustling at­mos­phere by set­ting off fire­crack­ers and bang­ing on gongs and drums.

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