TSMC chairman Morris Chang's remarks over the company and the semiconductor industry's business outlook have long served as a barometer for the capital market. But market response to Chang's comments about the industry's outlook for the second half of 2015 has been less enthusiastic.
In fact, international institutional investors have been on the side of selling TSMC shares since the beginning of June. TSMC shares edged down NT$1 or 0.7% to close at NT$142 (US$4.587) on the Taiwan Stock Exchange during the June 16 session.
At the company's latest shareholders meeting, Chang stressed that TSMC looks to see its consolidated revenues grow 10% on year in 2015.
Analysts have their own interpretations for the projected growth rate, and it seems that most view the growth rate negatively. The projected growth rate indicates that TSMC's revenues are likely to taper down in the second half of 2015 as compared to its strong performance in the first five months of 2015.
TSMC posted consolidated revenues of NT$70.16 billion for May 2015, representing a 15.4% increase on year. And for the first five months of 2015, its revenues totaled NT$367.52 billion, rising 35.7% from a year ago.
In other words, TSMC is expected to see its foundry orders decline in the second half of 2015, leveling off its sales growth.
Many observers consider Intel's recent announcement to acquire Altera, which makes use of TSMC's foundry services, may have an adverse impact on TSMC as Altera will most naturally switch its foundry orders to Intel.
Qualcomm is also likely to push ahead the production of its Snapdragon 820 chips at Samsung Electronics, using a 14nm process, as Qualcomm's Snapdragon 810 has been plagued by an overheating issue. Qualcomm has been producing the Snapdragon 810 at TSMC using a 20nm process.
The increasing competition in the foundry market is likely to force TSMC to cut its foundry service charges in the second half of 2015 in order to achieve its sales target for the year, a move which will also affects its earnings.
Article translated by Steve Shen
