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.
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