Top contract microchip maker TSMC said quarterly profit fell 21.5 percent as customers cleared out chip inventories, and warned falling prices could partly offset rising sales in the current quarter.
Taiwan Semiconductor Manufacturing Co (TSMC) said it expected July-September average selling prices (ASPs) to dip by a "low- to mid-single digit percentage" from the second quarter, deflating investor expectations for a sharp acceleration in the company's recovery.
"ASPs were the most surprising part," said Bhavin Shah, head of Asia-Pacific technology research at J.P. Morgan. "It should put some pressure on the share price, but it's not a big shock, just a short-term impact."
With shipments forecast to rise 14 to 16 percent from the second quarter, TSMC remains on track for recovery after earnings bottomed out in the first quarter as products like chips for third generation (3G) mobile phones and video game consoles roll down the production chain.
However, weak prices mean TSMC is unlikely to meet estimates from the more bullish analysts of around 20 percent quarter-on-quarter revenue growth in the July-September period.
TSMC said it earned T$18.37 billion ($576 million) in net profit in the second quarter, down 21.5 percent from a year ago, but up 9.2 percent from T$16.8 billion in the previous quarter.
Analysts had expected a net profit of T$17.4 billion, according to the mean of 12 forecasts compiled by Reuters Estimates.
The fourth-largest contract microchip maker, Chartered Semiconductor Manufacturing Ltd, reported a smaller-than-expected quarterly loss on Friday, and forecast third-quarter sales would jump 44-48 percent from the second quarter.
TSMC's main competitor, United Microelectronics Corp, is scheduled to report quarterly results on Wednesday.
TSMC's chief executive, Rick Tsai, assured analysts that weakening prices were only temporary.
Comments
Comments are closed.