Drop in demand sees TSMC sales fall

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the biggest maker of chips for other companies, said sales in November fell almost two-fifths from a year ago because of waning demand for its products.

Sales last month fell to NT$11.1 billion (US$321 million) from NT$18.2 billion a year ago, TSMC said in a statement. November sales rose 7 percent from NT$10.3 billion in October.

Earlier this month, TSMC said profit will rise about 150 percent from the third quarter as sales beat forecast.

"Computer chips are a leading indicator in the electronic sector," said Chen Hsien-chih, who manages Grand Cathay Securities Investment Trust Co's (大華投信) NT$1.2 billion Hi-Tech Fund.

TSMC is the fund's top holding. "The better-than-expected sequential sales will continue to support TSMC shares."

Global chip sales this year will decline by about a third from last year to US$117 billion as demand for personal computers shrinks, according to analysts.

Unlike smaller rivals United Microelectronics Corp (聯電) and Chartered Semiconductor Manufacturing Ltd (特許), TSMC stayed profitable by offering customers more advanced production methods that help pare costs.

TSMC said in October third-quarter net income fell 94 percent from a year ago to NT$1.2 billion.

TSMC shares have risen 58 percent this year, compared with a 12.6 percent gain in the TAIEX. The stock fell NT$0.5, or 0.6 percent, to NT$88.5 after gained 22 percent in past four days.

Meanwhile, United Microelectronics Corp (UMC, 聯電), the second-largest maker of chips for other companies, said sales in November fell by more than half from a year ago because demand for its products slumped.

Sales in November fell to NT$4.8 billion from NT$10.9 billion a year ago, UMC said in a statement. They rose about 2 percent from NT$4.7 billion in October.

The company said earlier this month that fourth-quarter sales will rise more than a tenth from the third quarter.