“It looks as if this period of economic weakness will last for a fairly long time, and business will become more difficult,” Tsai said.
The day before, TSMC slashed its fourth-quarter revenues and margin forecast by more than 8 percent, bringing the decline to more than 30 percent rather than 26 percent as forecast in October.
MediaTek may not be the last company to lower its forecast for this quarter. United Microelectronics Corp (UMC, 聯電), the world’s second-largest contract chipmaker, could follow suit by revising its forecast, scheduled for release tomorrow, along with the release of its sales figures for last month.
UMC joined its peers in cutting employees’ working hours this month.
The first quarter is usually slacker than the fourth quarter, Lee said, adding that more “extreme measures can be taken to gain more cash if things get worse.”
Those measures include selling old equipment and reducing inventory, which can increase a company’s cash position, and calling cash back from investment subsidiaries, Lee said.
But “any action is possible and every action is difficult,” Lee said.
Amid the slump, investors were trying to identify safer sector leaders with strong net cash positions and small losses or expected to be profitable by next quarter, Citigroup Inc analyst Andrew Lu (陸行之) said in a report.
It seems Taiwan’s TSMC, Siliconware, MediaTek and South Korean Samsung Electronics Co fit this theme, Lu said.
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