Taipei-Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, said Monday that it has achieved its sales guidance for the second quarter after sales growth momentum continued in June.
TSMC posted NT$213.86 billion (US$6.99 billion) in consolidated sales for the April-June period, down 8.57 percent from the previous quarter because of the slow season effect, according to data released by the chip maker.
The second quarter figure came within an earlier company forecast that pointed to a range between NT$213 billion and NT$216 billion, while the quarterly sales were just slightly higher than the lower end of the guidance.
In June, TSMC's consolidated sales totaled NT$84.19 billion, up 15.6 percent from a month earlier. The June sales hit the highest level for 2017 after its May figure rose 28 percent from a month earlier to NT$72.80 billion.
Market analysts said that the sales growth in May and June reflected the fact that some of its clients started to build up their inventories to make up for a shortfall seen ahead of the launch of the next-generation iPhones, likely in September.
In April, TSMC's consolidated sales fell more than 33 percent from a month earlier to NT$56.87 billion as the chip maker felt the pinch of the slow season effect. However, the company left its second- quarter sales guidance unchanged despite a slow April, so many analysts anticipated that sales would bounce back in the following two months.
TSMC's sales growth momentum is expected to continue in the third quarter, a peak season for the global semiconductor industry, from June analysts said. Many of them agreed that the chip maker is expected to post a 15 percent-20 percent sequential increase in revenue for the current quarter on the back of an increase in demand for chips made on the advanced 10 nanometer process, due to the presence of the new iPhones.
However, KGI Securities appeared downbeat, saying in a research note that TSMC's sequential sales growth for the third quarter could only range tween 14 percent-16 percent, since there are concerns that the launch of the new iPhones will be delayed slightly in the wake of a more complicated production process caused by an upgrade in specifications.
KGI Securities said that TSMC's sales were affected by a stronger Taiwan dollar in the first quarter, down 10.8 percent from the previous quarter, so that along with the slower sales growth in the third quarter, the chip maker is likely to post revenue increase for the entire 2017 at a low single digit pace, lower than an earlier company estimate of a 5 percent-10 percent rise.
In the longer term, however, the brokerage said it still has faith in TSMC, as its efforts to develop the sophisticated 7 nm process will help the chip maker continue to secure orders from Apple next year.
TSMC has scheduled an investor conference for Thursday to release the details of its second-quarter results and give guidance for the third quarter.
The June sales data was released after the local equity market closed. Shares of TSMC closed unchanged at NT$206.00 after hitting an earlier high of NT$207.00 on the main board Monday.
Source: Overseas Community Affairs Council