Chipmaker TSMC Cites Weaker Than Expected Q2 Smartphone Demand

Chipmaker Taiwan Semiconductor Manufacturing Co. during Q2 saw demand for smartphones become “weaker than we expected,” due to a sales slowdown in emerging markets and in China in the mid-priced and low-end smartphone segments, President Mark Liu said Thursday on an earnings call. The strong U.S. dollar relative to “emerging market currencies” was partly to blame for the weaker demand, but so were deteriorating “regional economic conditions,” Liu said. As a result of the slowdowns, the industry by the end of Q2 had managed to absorb only half of the “excess inventory” it had accumulated “in the supply chain,” he said. Recent “macro economy uncertainties in many parts of the world” has only “further dampened” the supply chain's confidence in end-market demand “and has caused customers to become even more cautious in managing their inventory,” he said. That said, “we expect our customers' end-market demand will improve in the second half” through new iPhone launches and several launches of Android-based high-end phones, he said. He also thinks the “continuing 4G migration in China and the demand recovery in emerging markets will further support” second-half growth, he said.