14 DAY TRIAL // The current economic turmoil has affected IT industry players and led to declining semiconductor sales, which determined the leading global foundry Taiwan Semiconductor Manufacturing Company (TSMC) to lower the forecast for the fourth quarter of the year. The company is reported to have lowered the prevision regarding Q4 sales well below the previously announced ones due to the reduction of wafer shipments.
At the same time, the foundry announced it did not plan to cut off any job, indicated TSMC CEO Rick Tsai, but it is a known fact that the company is encouraging its staff to take unpaid vacations in order to focus on personal problems.
The newly announced forecast shows that the company expects the fourth quarter revenues to be placed around $1.9 billion, which would be 8-9 percent lower than the previsions TSMC made in October. Moreover, the forecast also marks a 32 percent sequential drop from the consolidated sales the company announced for the third quarter.
The profit forecast has been cut as well, as the foundry expects to see the fourth quarter gross profit margins lowered by 30 to 32 percent. The operating profit margins are expected to drop 17 to 19 percent, down by 4 percentage points each from the previously made prevision, announced TSMC. The company also said that this would be the third time in its history when it downwardly adjusted its financial forecast, the last time it did so being in 2001 during another semiconductor industry downturn.
The dramatic changes in the market dynamic this quarter are affecting other semiconductor industry giants as well. Intel has already been reported to be lowering its outlook for the fourth quarter of the year. Initially, Intel expected the Q4 revenue to be of around $10.9 billion, but lowered it to $10.1 billion at a point, then to $9 billion.