TSMC Slumps After Sales Forecast Trails Estimates: Taipei Mover

Taiwan Semiconductor Manufacturing Co. (2230), the world’s largest contract manufacturer of chips, fell the most in more than four years after forecasting sales that trailed analyst estimates.

TSMC dropped 6.9 percent, the most since December 2008, to close at NT$98.20 in Taipei. The company yesterday forecast third-quarter sales of as much as NT$164 billion ($5.5 billion) in the three months ending September. That compared with the NT$164.5 billion average of 25 analyst estimates compiled by Bloomberg before the announcement.

Slumping demand for personal computers is crimping growth for the Hsinchu, Taiwan-based company even as it benefits from rising demand for mobile phone chips. TSMC joins Intel Corp. (INTC), the Santa Clara, California-based semiconductor maker, in predicting third-quarter sales below analyst expectations.

“The guidance is slightly lower than expectations,” said Alan Tseng, vice president of Capital Investment Management Corp. in Taipei, which has a neutral rating on TSMC. “The company isn’t likely to post stunning growth any more.”

TSMC yesterday posted earnings that beat analyst estimates, with net income rising 24 percent to NT$51.8 billion in the three months ended June. That compared with the NT$49.4 billion average of 20 analysts.

Chairman and Chief Executive Officer Morris Chang, 82, said yesterday he plans to hand over the CEO position next year and will remain as chairman of the board. Chang didn’t elaborate on the succession plans after saying last year he may appoint more than one CEO after relinquishing the post.

Intel forecast July 17 that third-quarter sales may fall short of some analysts estimates as a slump in the personal computer market erodes its largest business.

To contact the reporters on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net; Cindy Wang in Taipei at hwang61@bloomberg.net

To contact the editor responsible for this story: Robert Fenner at rfenner@bloomberg.net

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