Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, came under pressure yesterday amid speculation that its major clients have cut their orders.
The stock faced a sell-off on the Taiwan Stock Exchange (TWSE) after the Chinese-language Economic Daily News reported that four major TSMC clients — MediaTek Inc (聯發科), Advanced Micro Devices Inc, Qualcomm Inc and Nvidia Corp — have scaled back their orders, citing a JPMorgan Chase & Co report.
The order cut has led TSMC to shut down four extreme ultraviolet (EUV) lithography machines, which roll out high-end chips, the report said.
Photo: Cheng I-hwa, Bloomberg
According to the report, demand for consumer electronic products such as smartphones and emerging technologies including high-performance computing devices, is weakening as the global economy slows down, impacting TSMC\'s operations.
In addition, the US government has instructed Nvidia and AMD not to supply their high-end graphics processing units to China, a move which also hurt demand, the report said.
The report said the four major clients accounted for more than 30 percent of TSMC\'s total sales and the shutdown of the four EUV lithography machines is likely to cut the chipmaker\'s net profit by 8 percent next year, with sales growth expected to hit 5 percent in US dollar terms.
The report added that TSMC\'s capital expenditure is expected to fall to US$36 billion in 2023 from an expected US$40 billion for 2022.
TSMC said it would not comment on market rumors and reiterated that its production capacity remains fully utilized until the end of the year and its sales growth forecast for the year remains unchanged.
Although the global economy faces headwinds in the short term, the long-term demand in the semiconductor industry is expected to remain solid, TSMC said.
“It appeared that the report about TSMC’s clients cutting orders stunned the market, pushing down the stock sharply, and the broader market had no choice but to follow,” Cathay Futures Consultant Co (國泰證期顧問) analyst Tsai Ming-han (蔡明翰) said.
“But I still have faith in TSMC’s lead over its peers in high-end processes, and the impact on its share price from the speculation could be short-lived,” Tsai said.
TSMC, the most heavily weighted stock in the local market, shed 3.37 percent to close at NT$472.5, with 34.63 million shares changing hands, an increase from Tuesday’s 16.66 million shares, TWSE data showed.
TSMC’s retreat contributed about 135 points to the decline of the TAIEX, which closed 267.15 points, or 1.82 percent, lower at 14,410.05, exchange data showed.
Chip stocks are in focus in Asia trading after a senior executive at Samsung Electronics Co warned that the semiconductor industry could be in for a rocky close this year.
“The general perception earlier this year was that the second half of would be better than the first half, but from April to May, it changed drastically,” said Kyung Kye-hyun, head of Samsung’s Device Solutions Division, which oversees the company’s semiconductor operations. “The world is changing so quickly.”
Kyung said the outlook for the second half of the year is gloomy, and Samsung is not yet seeing momentum for a recovery next year.
Kyung made the comments during a rare briefing yesterday at the company’s new chip fab in Pyeongtaek, South Korea.
Samsung’s strategy is to respond faster to market changes, rather than stick to an investment plan prepared in advance, he said.
That said, the company will do its best to keep capital expenditures steady, he added.
Separately, Macronix International Co (旺宏), the world’s biggest supplier of NOR flash memory chips, yesterday said revenue plummeted 25.6 percent to NT$3.73 billion (US$120.6 million) last month, from NT$5.01 billion a year earlier.
Memory module supplier Adata Technology Co (威剛科技) also reported that revenue declined 6.6 percent annually to NT$3 billion last month from NT$3.22 billion.
Adata said consumer demand fell short of expectations during the peak season, but the company sees limited room for DRAM spot prices to dip further.
Additional reporting by Bloomberg and Lisa Wang
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
Nvidia Corp yesterday announced that CEO Jensen Huang (黃仁勳) would attend an employee meeting in Taipei tomorrow to celebrate the launch of the company’s Taiwan headquarters project. Huang would attend a gathering at the site of Nvidia’s planned headquarters in Beitou Shilin Technology Park (北投士林科技園區), the company said in a statement. After arriving in Taiwan on Saturday last week, Huang told reporters that he plans to meet with Quanta Computer Inc (廣達) chairman Barry Lam (林百里) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman C.C. Wei (魏哲家), and would attend the groundbreaking ceremony for Nvidia’s Taiwan headquarters tomorrow. Nvidia has not yet applied
RSS