Taiwan chipmakers have quietly revised downward their revenue growth projections for the third quarter of 2018, as their order visibility for the quarter remains unclear amid the escalating China-US trade tensions that may undermine the shipment performance of their terminal customers in the quarter, according to industry sources.

The sources said that Taiwan IC designers earlier estimated their third-quarter revenues would post double-digit sequential increases, but they now have lowered growth projections for the quarter, as customers have turned conservative placing orders due to uncertainties associated with trade spats between the two economic powers.

Traditional sales boom in the third quarter seems to be losing steam on difficult rollout of new notebook and PC models and lackluster sales performance of smartphones and other mobile devices. This, coupled with the fact that the China-US trade disputes are not likely to ease in the short time, has made it difficult for brand vendors and ODMs to predict their actual shipment volumes for the quarter, the sources said.

Despite unclear shipment prospects, terminal customers have still asked IC designers to maintain a certain inventory growth to support possible shipment upturn in the third quarter, generating increasing inventory risks for chipmakers.

Industry sources said that even Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly seen a slower-than-expected pickup for its 12-inch foundry capacity utilization in the third quarter, as Apple may not release AP orders for new iPhones until September. This may drive TSMC to revise downward its revenue growth goal for the third quarter, the sources said.

Likewise, Taiwan IC designers have recently felt shrinking momentum in order placement from customers. Many of them saw their June revenues buck a regular growth trend for the month, as customers have started to cut order volumes since the month on grounds that they have to beautify their fiscal financial statements.

By: DocMemory
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