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.
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has secured three construction permits for its plan to build a state-of-the-art A14 wafer fab in Taichung, and is likely to start construction soon, the Central Taiwan Science Park Bureau said yesterday. Speaking with CNA, Wang Chun-chieh (王俊傑), deputy director general of the science park bureau, said the world’s largest contract chipmaker has received three construction permits — one to build a fab to roll out sophisticated chips, another to build a central utility plant to provide water and electricity for the facility and the other to build three office buildings. With the three permits, TSMC
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
RSS