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TSMC January sales fall to 6-month low

2019/02/15 16:40:10

Taipei, Feb. 15 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, reported a six-month low for sales in January, which analysts chalked up to weakening global demand.

In a statement released Friday, TSMC said it posted consolidated sales of NT$78.09 billion (US$2.53 billion) in January, down 13.1 percent from a month earlier and also down 2.1 percent from a year earlier.

It was the third consecutive month that TSMC's monthly sales fell, and the January figure was the lowest since the company reported sales of NT$74.37 billion for July 2018, TSMC data showed.

Analysts felt slowing global demand was a bigger factor in the drop in sales than a production problem encountered by the company in January and reported to the Taiwan Stock Exchange on Jan. 29.

The problem, which was identified on Jan. 19 and later found to be caused by substandard raw materials, resulted in low yields on wafers produced with the 12 nanometer and 16nm processes at TSMC's Fab 14B, a 12-inch wafer foundry in Tainan, TSMC said.

Despite the incident, TSMC decided not to revise its sales guidance for the first quarter, which projected consolidated sales of between US$7.3 billion and US$7.4 billion, down 22 percent from the previous quarter.

Echoing TSMC, analysts have generally minimized the impact of the production mishap on January and first quarter sales, and they expect TSMC to achieve its Q1 sales goal without any difficulties.

TSMC has been less than upbeat over global demand in 2019 because of the uncertainty caused by the ongoing trade dispute between the United States and China and hinted that it was hurting sales.

At an investor conference in mid-January, TSMC attributed its relatively weak sales at the end of 2018 and its low projection for the first quarter to inventory adjustments throughout the semiconductor industry.

Those adjustments are expected to remain a factor into the second quarter but return to normal in the middle of this year, TSMC said.

TSMC is now projecting sales for 2019 to increase 1-3 percent from a year earlier, down from an earlier estimate of a 5-10 percent increase.

(By Chang Chieh-chung and Frances Huang)