Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday saw its market value shed NT$400 billion (US$13.6 billion) after the chipmaker unexpectedly cut its revenue growth forecast for this year to 10 percent annually on weak demand for Apple Inc’s iPhones and uncertainty over cryptocurrency mining demand.
Three months ago, TSMC estimated that its revenue would grow between 10 and 15 percent this year in US dollar terms.
TSMC shares tumbled 6.34 percent to NT$229 yesterday, the lowest they have been in four months. That slashed the company’s market value to about NT$5.94 trillion from NT$6.34 trillion on Thursday.
Turnover of the stock nearly quadrupled on the Taiwan Stock Exchange, with about 128 million shares changing hands, up from 33 million shares the previous session.
“TSMC management expects demand for cryptocurrency mining devices in the second half of this year to be stronger than the first half, suggesting most of the [revenue growth forecast] cut will be from the new iPhones,” Yuanta Securities Co (元大證券) semiconductor analyst George Chang (張家麒) said in a research report.
TSMC’s forecast that advanced 7-nanometer technology revenue contribution this year is likely to be 1 percentage point lower than its previous estimate of 10 percent, is more evidence of a weakening demand for premium smartphones — mainly the new iPhone, Chang said.
Apple is the Taiwanese chipmaker’s biggest client. Based on TSMC’s annual financial report released yesterday, Apple contributed NT$214.2 billion to TSMC last year, accounting for 22 percent of the firm's total revenue.
TSMC, which counts Nvidia Corp and HiSilicon Technologies Co (海思) among its clients for advanced technologies, on Thursday also reduced its annual growth forecast for the global semiconductor industry to 5 percent this year, compared with an earlier estimate of between 5 and 7 percent.
Yuanta lowered TSMC’s target share price to NT$260 from NT$265, while CGS-CIMB Securities (Hong Kong) Ltd (銀河-聯昌證券) reduced its price to NT$224 from NT$257.
CGS-CIMB analyst Peter Chan (詹逸群) said in a report that he is “concerned about the volatility of cryptocurrency. Cryptocurrency mining is done using application-specific integrated circuits or graphics processing units, and TSMC has exposure to both.”
The brokerage would not assign much of a contribution from cryptocurrency mining demand to its earnings estimate for TSMC, until global economic powers agree on a regulated virtual currency, Chan said.
TSMC gained enough market share over the past eight years to seize 56 percent of the world’s semiconductor market last year, despite escalating competition from rivals, the company said in the annual report.
Separately, the firm’s board of directors yesterday approved the nomination of nine board directors, excluding incumbent chairman Morris Chang (張忠謀), in anticipation of Chang’s retirement on June 5.
Cochief executive officer C.C. Wei (魏哲家) is to succeed Chang as the company’s sole chief executive officer and cochief executive officer Mark Liu (劉德音) is to become the company’s chairman. Wei and Liu were nominated as company board members.
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US