Mon, Sep 10, 2018 - Page 15 News List

Slowdown in smartphone sales tests TSMC

Reuters, HSINCHU

One major investor, speaking on condition of anonymity because he was not authorized to discuss individual companies, said he was cautiously optimistic that they could adequately replace “hero” Chang, who ran TSMC for 30 years.

Analysts say the company has some fresh opportunities with the pull-back of GlobalFoundries and could win more business from top chip vendors, including Advanced Micro Devices Inc and Qualcomm.

Still, Liu said that global overcapacity in an older production technology, stemming in part from new investment by Chinese firms, “gives you headaches.”

The company said that category accounted for 23 percent of revenue.

Questions about long-term growth loom large.

Liu expressed optimism that the “cooling down” in smartphones would last only a couple of years before 5G technology drives a new round of growth.

However, it is far from a sure thing.

“What they are doing right now is moderating their spending and returning extra cash back to investors,” Li said.

The big test for Liu is to prepare “for something new, some growth in the next era,” Li said.

Liu is confident that will happen, and said the company might increase spending on advanced production techniques in light of the GlobalFoundries retreat.

In China, where TSMC has pledged to invest US$3 billion on its latest factory, Liu said the firm would stay on the offensive.

“We will [invest more] to make sure we have a local position to compete,” Liu said.

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