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Chipmaker TSMC cuts revenue, capex goals after Q2 profit rise

Reuters  |  TAIPEI 

(Reuters) - cut its annual revenue and capital expenditure estimates on Thursday, as the world's largest contract chipmaker braces for slowing growth in the and mining industries.

TSMC, which makes chips for giants such as Apple Inc, and Nvidia Corp, its lowered 2018 revenue growth forecast to a high single digit percent from 10 percent previously, and trimmed its expected capex range to $10-10.5 billion from $10.5-11 billion.

For the April-June, reported a 9 percent rise in net profit from a year earlier to T$72.29 billion ($2.36 billion), in line with market estimates, on strong demand for high-end chips used in mining.

Revenue rose 11 percent to US$7.85 billion, the middle of the US$7.8 billion to US$7.9 billion range forecast in April.

Sales to the personal computer industry accounted for 21 percent of total revenue, from 8 percent a year prior, while revenue from the that includes fell to 48 percent from 58 percent.

The firm could face slowing demand for high-end chips used in mining as miners switch to due to price volatility as well as increased regulatory scrutiny of the sector, analysts said.

"We anticipate our business will benefit from new product launches ... while demand will decrease from the second quarter," told analysts.

An intensifying trade spat between the and could also be a near-term risk for TSMC, which has many of its biggest clients in mainland China, analysts said.

Revenue from jumped to 23 percent from 11 percent a year earlier, though remains its biggest market with 53 percent of total revenue, down from 59 percent.

Prior to the earnings announcement, shares in closed up 0.67 percent versus a flat wider market. The stock has slipped less than 1 percent so far this year.

($1 = 30.5070 Taiwan dollars)

(Reporting by Yimou Lee and Jess Macy YuEditing by Christopher Cushing)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 19 2018. 12:57 IST