Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar.
Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter.
The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then further delayed to Aug. 1 to allow for negotiations. Taiwan’s tariff rate was ultimately set at 20 percent, effective on Friday last week.
Photo: Annabelle Chih, Bloomberg
In April, the US also launched an investigation into potential tariffs on semiconductor imports. On Wednesday, Trump said a tariff of about 100 percent could be imposed on imported semiconductors, with exemptions for manufacturers building plants in the US.
Echoing MediaTek’s outlook, sensor chip designer PixArt Imaging Inc (原相科技) said customers producing computer mice front-loaded large orders in the first half, but demand is likely to slow in the third quarter.
Display driver chip designer Novatek Microelectronics Corp (聯詠科技) also said that customers have become cautious about new orders after aggressive purchases earlier this year.
The appreciation of the NT dollar is another headwind. The local currency rose 10.97 percent against the US dollar in the second quarter, ending June at NT$29.902, which led to foreign exchange losses for several firms.
For example, application-specific chip designer Progate Group Corp (巨有科技) posted a second-quarter net loss of NT$0.06 per share.
Although the NT dollar has weakened slightly since the start of the third quarter, the industry still expects the average exchange rate to remain stronger than in the previous quarter, which could continue to weigh on operations.
MediaTek forecasts third-quarter revenue to fall 7 to 13 percent from the previous quarter, to between NT$130.1 billion and NT$140 billion (US$4.36 billion and US$4.68 billion).
By contrast, contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects strong demand for artificial intelligence applications to drive an 8 percent quarter-on-quarter revenue increase in US dollar terms, based on an exchange rate of NT$29 to the greenback.
For the full year, TSMC projects revenue growth of 30 percent in US dollar terms, outpacing the global semiconductor industry’s estimated 15.4 percent expansion.
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