Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s biggest chip packager, yesterday slashed its fourth-quarter target, blaming accelerating contraction in demand amid a global economic slowdown.
ASE said fourth-quarter revenue could decline by between 25 percent and 28 percent quarter-on-quarter, rather than its forecast of a drop of between 15 percent and 20 percent a month ago, following in the steps of semiconductor heavyweight Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which recently trimmed its outlook.
“As end demand is shrinking faster amid deteriorating global economic prospects, the company’s fourth-quarter revenues will be lower than the forecast it made on Oct. 31,” ASE said in a filing to the Taiwan Stock Exchange.
After adjustment, revenues could drop to as low as NT$18.6 billion (US$556.5 million) in the quarter ending on Dec. 31 from NT$25.82 billion in the third quarter.
The Kaohsiung-based company also trimmed its gross margin forecast by about 5 percentage points to between 14 percent and 15 percent from its earlier estimate of 20 percent.
“The revision could be a result of accelerating order loss from ASE’s integrated design manufacturing customers as they usually reduce outsourcing during a downturn,” said Kenneth Yang (李克揚)), a semiconductor analyst with Taipei-based Primasia Securities Co.
TSMC’s local rival, United Microelectronics Co (UMC, 聯電), the world’s second-largest contract chipmaker, yesterday said it could adjust its fourth-quarter forecast.
“We are evaluating the possibility. It will depend on how big the decline is in revenues in the recent two months,” Sandy Yen (顏勝德), a public relations officer at UMC, said by telephone.
UMC will make a decision next Tuesday when it releases last month’s sales figure, Yen said.
TSMC cut its forecast for fourth-quarter revenues by more than 8 percent on Monday and slashed its gross and operating margin forecasts by 4 percentage points each.
“The latest downward revision will convey a strong message that sentiment is really terrible, and the industry slump may be even worse than the last trough in 2000,” Yang said.
Customers seem to be wary of placing orders as they are worried that recent robust Thanksgiving sales may not carry through the Christmas holidays, Yang said.
Citigroup yesterday cut its earnings forecast for TSMC by 3.6 percent to NT$98.43 billion this year and by 33.5 percent to NT$49.51 billion next year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
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