The world's leading contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC,
"Customers for our most advanced technology are increasing," Tseng Fan-cheng (
Tseng's comment that global chip production will increase as much as 20 percent was earlier reported by Taiwan's Commercial Times. He's more bullish than market researcher IC Insights Inc, which in June said it expects the global chip market will increase 16 percent to US$162 billion next year. It forecast a 21 percent decline in demand this year.
"The consensus is that demand will recover some time in the second half of 2002," said Steven Hsieh, who helps manage US$63.5 million in securities for Dresdner Asset Management Co. "The companies don't have visibility beyond three months." TSMC, which supplies chips to makers of PCs, cell phones and consumer electronics joins No. 1 chipmaker Intel in forecasting the worst may be behind for them.
Earnings at chip companies have slumped this year as orders fell and prices dropped.
TSMC's shares rose NT$1.5, or 2.3 percent, to NT$67.5 on the Taiwan Stock Exchange. The company's US-listed shares fell 1.8 percent to US$15.63 yesterday.
This year's fall in chip sales may be the worst since 1985, IC Insights Inc said.
TSMC expects demand in the PC business to stabilize first and return to previous annual growth rates of between 10 percent and 15 percent by the middle of next year, Tseng said.
The recovery of demand for high-speed networks will follow the PC recovery in 2002, Tseng said. Other areas of the communications industry are still reducing inventory, he said.
Intel chief executive Craig Barrett said in Taiwan last week that the PC market should start to recover in the third and fourth quarters. Barrett did not say whether Intel's sales are increasing.
Some investors said the time is not right to buy shares in TSMC.
"I'll wait another quarter or two," said Chen Yi-sheng, who helps manage US$43 million in investments at Taiwan Securities Co Ltd (
Merrill Lynch & Co last week raised its recommendations on TSMC to "buy" from "accumulate."
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