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TSMC scales back capital spending for 2015 (update)

TSMC scales back capital spending for 2015 (update)

Taipei, April 16 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest contract chip manufacturer, cut its annual capital expenditure target by NT$1 billion (US$32 million) Thursday as it continued to improve its capital efficiency. The company's 2015 capital expenditure is expected to be between US$10.5 billion and US$11 billion, compared with the range of between US$11.5 billion and US$12 billion it set in January, TSMC Chief Financial Officer Lora Ho (???) said at an investors' conference. However, the reduction in capital expenditure will not affect TSMC's overall capacity planned for 2015, as the company will convert part of its 20-nanometer capacity to more advanced chip-making technologies, she added. The announcement came just days after TSMC's main competitor, Intel Corp., said it will cut its 2015 capital spending to US$8.7 billion from US$10 billion, a move that analysts said should improve free cash flow for the world's largest semiconductor maker. Also on Thursday, TSMC forecast that its second-quarter revenue will decrease by 7-8 percent sequentially to between NT$204 billion and NT$207 billion, lower than the market expectations of a 3-5 percent drop. Ho said the projected drop in the second-quarter revenue was due partly to inventory adjustments and a decline in the company's communication business. But she remained upbeat about an estimated "double-digit growth" in TSMC's 2015 full-year revenue, which she projected would be driven by better smartphone demand in the second half of 2015 and TSMC's plans to ramp up its 16-nanometer technology later this year. In the long term, TSMC expects a compound annual growth rate of 10 percent in its revenue and bottom line for the next five years, Ho said. TSMC, which manufacturers chips for Apple's iPhones, reported its second-highest quarterly net profit of NT$78.99 billion in the first quarter of 2015, on continued strong smartphone demand. But Mark Liu (???), one of TSMC's co-chief executives, revised his estimate for average growth in the semiconductor industry this year from 12 percent to 10 percent, and for the foundry sector from 5 percent to 4 percent, citing weak macroeconomic conditions and slow demand in emerging markets. (By Jeffrey Wu)


Updated : 2021-09-18 01:01 GMT+08:00