Wed, May 28, 2008 - Page 12 News List

Oil prices, currency appreciation may lead to hikes: TSMC


Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest custom-chip maker, said it may raise prices to counter higher costs.

“Semiconductor companies are under profitability pressure,” Jason Chen (陳俊聖), vice president of worldwide sales marketing, said yesterday at the company’s technology symposium in Hsinchu, where TSMC is based.

Higher oil prices and Taiwan’s appreciating currency are crimping the company’s earnings, Chen said. The chip industry’s trend of falling average selling prices and rising research and development costs is unsustainable, he said.

“We must change it,” Chen said. He didn’t say how much prices would be raised or when it would happen.

The nation’s consumer prices rose 3.86 percent last month year-on-year, the Directorate General of Budget, Accounting and Statistics (DGBAS) reported on May 5. The core CPI, which excludes prices of products such as vegetables, fruit, fishery products and energy, rose 3.1 percent year-on-year last month, the highest level since March 1999, the DGBAS said.

Separately, global semiconductor sales this year will probably increase less than previously forecast, on slumping demand for memory chips used in personal computers and consumer electronics, the industry’s largest association said.

Chip sales will probably rise 4.7 percent to US$267.7 billion this year, less than the 9.1 percent forecast in November, and will gain 5.8 percent next year, WSTS Inc said yesterday in a statement. Revenue increased 3.2 percent last year, the San Jose, California-based group said.

WSTS, whose members account for about 90 percent of the industry, joins market researcher ISuppli Corp and UBS AG in lowering the outlook amid concern the global economy is slowing. The worst housing slump in more than a generation in the US is undermining home values, consumer spending and overall growth.

Revenue in the industry will rise 4 percent to US$273 billion this year, less than the 7 percent forecast earlier, UBS said last month, citing “weak” prices for memory chips and slowing consumer spending. El Segundo, California-based ISuppli last month cut its projection to 4 percent this year from 7.5 percent.


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