“Due to a weaker global economy, a stronger USA dollarenvironment and a volatile financial market, the electronic device market has been negatively impacted”, said co-Chief Executive Mark Liu. TSMC’s full- year revenue growth will reach 10 percent, he said. An “unexpected” slowdown in the Chinese economy also dragged on demand, Liu said at an investor conference on Thursday.
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TSMC forecast consolidated revenues will fall to between NT$201 billion and NT$204 billion in the fourth quarter of 2015, while gross margin and operating margin will be between 47.5% and 49.5% and 36.5-38.5%, respectively.
TSMC’s announcement that it will cut up to 27% from capital expenditure this year to $8 billion came after Intel announced this week that it is trimming its capex by $400 million to $7.3 billion. Advanced technologies, defined as 28nm and more advanced technologies, accounted for 48% of TSMC’s total wafer revenues in the third quarter.
“TSMC is facing a combination of weaker-than-expected demand for PCs and smartphones, record high inventory, and a lower share of iPhone chip orders compared to a year ago”, Warren Lau, a Hong Kong-based analyst at Maybank Kim Eng Securities, said before the earnings release.
China’s smartphone market, the world’s largest, shrank in early 2015 for the first time in six years.
TSMC sees zero growth in the global semiconductor industry this year after previously expecting a 3 percent increase, Liu said.
Meanwhile, Liu said the company’s development of advanced 7 nanometer and 10 nanometer chips are on track with plans to start production of the latter in the second quarter of 2016.
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The company said in a financial statement that while revenues in its third quarter were essentially flat compared to the previous quarter, revenues were 4.3 percent down compared to the same quarter in 2015.
