Sat, Aug 17, 2013 - Page 14 News List

Smartphones, tablets to lift chip demand in Q3

INCREASING ORDERS:Chip designers are expected to lead the advance, while contract chipmakers are forecast to see slower growth due to inventory buildup, ITIS said

By Lisa Wang  /  Staff reporter

Taiwanese semiconductor companies are expected to see revenue growth of 5.6 percent this quarter, supported by continuing strong demand for smartphones and tablets in China and emerging markets, Industry and Technology Intelligence Services (ITIS) said.

Revenue is forecast to expand at a slower pace sequentially this quarter to NT$506.9 billion (US$16.9 billion), compared with growth of 16.8 percent to NT$480 billion last quarter, the market researcher said in a report released on Thursday.

ITIS also raised its revenue forecast for the full year to NT$1.87 trillion, representing an annual growth of 14.4 percent from NT$1.63 trillion. Three months ago, the researcher estimated that revenue would grow 9.3 percent to NT$1.79 trillion.

Chip designers such as MediaTek Inc (聯發科) are expected to lead the advance this quarter, with revenue rising 10 percent sequentially to NT$133.8 billion, benefiting from increasing demand for low-end smartphones in China, ITIS said.

“The rise of low-end smartphones will be a boon to Taiwanese chip designers, as they can supply high-quality chips at competitive prices,” ITIS said in the report.

MediaTek predicted earlier this month that its revenue would rise by 5 to 13 percent sequentially during the quarter ending Sept. 30, backed by growing demand for its chips used in smartphones and tablets. MediaTek primarily supplies handset chips to Chinese companies including Lenovo Group (聯想) and Xiaomi Technology Co (小米).

Contract chipmakers are expected to see revenue growth this quarter slow to 3.9 percent — from 16 percent last quarter — to NT$205 billion this quarter, as customers have turned conservative amid an inventory buildup, ITIS said.

Contract chipmakers account for the biggest portion — at about 40 percent — of overall revenue made by Taiwanese semiconductor firms.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, has said it expects its revenue to expand by 3 to 5 percent this quarter from last quarter’s historical high.

Deutsche Bank analyst Michael Chou (周立中) forecast that TSMC and MediaTek would reach the upper end of their forecast range for this quarter, citing faster-than-expected inventory digestion.

Chou said he expected the stock prices of TSMC and MediaTek to bottom out in the near term as chip designers’ inventory had begun to fall last quarter — one quarter ahead of his expectations.

That would create new order momentum for local semiconductor companies, he said.

He retained TSMC and MediaTek on his top picks.

TSMC rose 0.52 percent to NT$96.50, while MediaTek was unchanged at NT$360 yesterday, Taiwan Stock Exchange data showed.

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