TAIPEI—Taiwan Semiconductor Manufacturing Co. reported its
slowest earnings growth in a year in the second quarter, as the
maker of iPhone chips loses some orders to rivals while global
smartphone demand tapers.
TSMC said its net profit for the three months ended June 30 was
79.42 billion New Taiwan dollars (US$2.56 billion), up 33% from
NT$59.70 billion a year earlier, and exceeded analysts'
expectations. Its revenue in the quarter reached NT$205.44 billion,
the company said, up 12% from NT$183.02 billion a year ago and
matching management's target.
Earnings growth at TSMC reached 79% in the fourth quarter last
year, propelled by strong demand for Apple Inc. devices. TSMC broke
Samsung Electronics Co.'s monopoly last year and became the primary
supplier of chips for iPhones.
However, the Taiwanese chip maker warned in January that it
would lose some orders to Samsung, which is months ahead in
migrating to the next-generation chip process technology. The South
Korean chipmaker's finer 14-nanometer technology will pack more
capabilities on a chip and lower production costs, putting TSMC's
contracts—not only with Apple—at risk. Analysts say the rising
supply of cheaper Chinese-made chips is also putting pressure on
incumbent players including TSMC.
As the world's largest maker of non-memory microprocessors based
on others' designs, sales at TSMC are seen as a barometer of global
technology demand.
Market research firm IDC says global smartphone shipment growth
is set to slow to 12% this year, from 26% growth in 2014, as the
market matures and becomes more crowded. Adding to TSMC's woes,
Qualcomm Inc., one of its major customers, lost a massive contract
to supply its new Snapdragon 810 processors to Samsung's latest
flagship Galaxy S smartphones.
Write to Aries Poon at aries.poon@wsj.com
Access Investor Kit for Taiwan Semiconductor Manufacturing Co.,
Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=TW0002330008
Access Investor Kit for Apple, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0378331005
Access Investor Kit for Taiwan Semiconductor Manufacturing Co.,
Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8740391003
Subscribe to WSJ: http://online.wsj.com?mod=djnwires