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TSMC gets negative outlook from analysts

Posted: 20 Jan 2015 ?? ?Print Version ?Bookmark and Share

Keywords:16nm? A9? Exynos? smartphones? A8?

Raising capex ante

TSMC raised its capital expenditure budget for 2015 to $11.5-12 billion, an increase of 11.5-20 per cent compared with 2014, mainly due to its confidence in demand for advanced geometries. The company said volume production for 16nm FinFET is on schedule for the second quarter of this year.

TSMC's sales revenue in 2015 will likely rise by "several percentage points" more than the estimated industry average of 12 per cent, according to TSMC co-CEO Mark Liu.

For the first quarter of 2015, TSMC forecast sales revenue ranging from NT$221 billion ($6.93 billion) to NT$224 billion ($7.03 billion), about 50 per cent higher than the first quarter of 2014.

While TSMC may grow sales by a mid-teen percentage in 2015, its year-on-year momentum has peaked and will slow materially in the second half of 2015, according to Maybank Kim Eng analyst Warren Lau.

"The smaller share of 14/16nm in 2015 and slower ramp of the 16nm node in the second half imply the new A9 chipset is likely to switch to Samsung," Lau said. This, compounded with IDM-enabled solutions, which will reduce outsourcing, may hurt long-term growth opportunities, according to Lau. Samsung will reduce its demand for Qualcomm's wireless chips in 2015, which will have an adverse impact on TSMC, he said.

Adding to concerns about the outlook for TSMC, sales of smartphones, the biggest business driver for chipmakers in general, are likely to slow this year. Growth of global smartphone sales, forecast at 12 per cent this year, will drop from 26 per cent in 2014, according to market research firm International Data Corp.

- Alan Patterson
??EE Times

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