TSMC 2011 sales growth target not achievable
Jessie Shen, DIGITIMES, Taipei [Monday 5 September 2011] 
Taiwan Semiconductor Manufacturing Company (TSMC) chairman and CEO Morris Chang told reporters on the sidelines of a recent technology forum in Taipei that the company's previous target of 20% sales growth for 2011 would not be reached due to disappointing end-market demand in line with weaker-than-expected global economic growth, according to a TV report.
But Chang noted that company revenue growth should outperform the industry average in 2011, indicated the report by the local Chinese Television System (CTS).
TSMC already realized in the second quarter that the annual 20% sales growth for 2011 was unrealistic, as utilization rates dropped, including that for high-end manufacturing processes, according to Digitimes Research analyst Nobunaga Chai. The foundry found that customers' projections had been too ambitious, added Chai.
The doubt about achieving the 20% growth target had nothing to do with the impact Japan's earthquake disaster earlier this year, but was more related to concerns about weakening end-market demand especially that coming from the US, Chai pointed out. While new foundry capacity has been coming online, demand has been sluggish causing decreases in foundry players' ASPs, Chai said.
Chai estimated the global foundry market growth for 2011 at only 5%, below the 7% predicted by TSMC. Chai also forecast that contract chipmakers including TSMC would see a sequential drop in third-quarter utilization rates, and possibly flat growth in the fourth quarter in a best-case scenario.
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