Several semiconductor firms cautious about Q3 amid tariff concerns

Taipei, Aug. 9 (CNA) Several semiconductor suppliers in Taiwan are taking a cautious view of the third quarter, typically a peak season for the industry, citing uncertainty from U.S. tariffs and the stronger Taiwan dollar.

Smartphone IC designer MediaTek Inc. said clients had rushed to place orders in the first half of the year to avoid tariffs threatened by the Trump administration. As a result, it expects weaker-than-usual peak-season demand in the third quarter.

The U.S. tariff plan, unveiled April 2, included a proposed 32 percent duty on Taiwanese goods. Implementation was initially delayed by 90 days to July 9, then extended to Aug. 1 to allow for negotiations. Taiwan's tariff rate was ultimately set at 20 percent, effective Friday.

In April, the U.S. also launched an investigation into possible tariffs on semiconductor imports. On Wednesday, U.S. President Donald Trump said a tariff of about 100 percent would be imposed on imported semiconductors, but manufacturers building in the U.S. would be exempt.

Echoing MediaTek, sensor chip designer PixArt Imaging Inc. said clients producing computer mice placed large orders in the first half, but demand is expected to slow in the third quarter. Display driver IC designer Novatek Microelectronics Corp. also said its clients have turned cautious about new orders following aggressive buying earlier this year.

The appreciation of the Taiwan dollar is another concern. The currency rose 10.97 percent against the U.S. dollar in the second quarter, ending June at NT$29.902, which led to foreign exchange losses for several firms. Application-specific IC designer Progate Group Corp., for example, reported a net loss of NT$0.06 per share for the second quarter.

Although the Taiwan dollar has weakened slightly since the start of the third quarter, the industry still expects the average exchange rate to be stronger than in the second quarter, which could continue to weigh on operations.

MediaTek projects its third-quarter revenue will fall 7-13 percent from the previous quarter, to between NT$130.1 billion and NT$140.0 billion.

By contrast, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) expects to benefit from strong demand for artificial intelligence applications, forecasting an 8 percent revenue increase from the second quarter in U.S. dollar terms, based on an exchange rate of NT$29 to the greenback.

For all of 2025, TSMC projects revenue growth of 30 percent in U.S. dollar terms, outpacing the estimated 15.4 percent increase for the global semiconductor industry.