Taiwan chip firms pin recovery hopes on new gadgets (MORE TOYZ!)
Sunday May 11, 2:19 am ET
By Michael Kramer and Doug Young
TAIPEI/HONG KONG, May 11 (Reuters) - Taiwan's chip giants are heralding a long-awaited recovery in the semiconductor sector by the second quarter but analysts say the jury is still out, warning any recovery may not last past the second quarter.
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The upbeat forecasts came from Taiwan Semiconductor Manufacturing Co (TSMC) (Taiwan:2330.TW - News), the world's top contract chipmaker, and United Microelectronics Corp (UMC) (Taiwan:2303.TW - News), which are banking their aggressive shipment and price forecasts on the launch of high-tech gizmos which they expect to rekindle consumer interest.
But analysts said even PC makers and the companies that provide new generation chips to cellphones were unsure if demand for their new products would materialise.
"The question is if end-demand, at the end of the day, can digest the new chips," said Nomura Securities analyst Rick Hsu.
TSMC had announced second-quarter shipment and price forecasts equating to a quarter-on-quarter revenue rise of more than 24 percent. Analysts had forecast a 15-20 percent rise.
Its archrival UMC (NYSE:UMC - News) gave similar estimates, while smaller China-based competitor Semiconductor Manufacturing International Corp (SMIC) told Reuters demand was increasing.
The aggressive forecasts surprised many as the sector casts about for a way out of a slump that began with a tech and telecommunications bust in 2001.
SHINY NEW GADGETS
The chip giants see the way out in high-tech innovations planned by makers of mobile phones and computers.
In the pipeline for mobile phone makers, for example, is a new generation of wireless high-speed data services which they hope spur purchase of new handsets.
"Our view going forward is that consumers are expecting these kinds of products. They are starting to ask for it," said Jack Yang, Asia product marketing director for Motorola Inc (NYSE:MOT - News), which has outsourced chip production to both TSMC and UMC.
Motorola is launching 13 new high-speed data phones this year, Yang said. Its microchip operation is also offering 50 percent more new semiconductors than last year.
TSMC's largest customer, graphics chip maker Nvidia Corp (NasdaqNM:NVDA - News) on Thursday announced a mid-May launch for its next high-end chip, a product eagerly awaited by computer gamers demanding faster and more detailed action on their computers.
Intel Corp (NasdaqNM:INTC - News) said last month it received orders for hundreds of thousands of its new Centrino chips that connect laptops with wireless high-speed Internet connections.
While the pipeline of new products looks good, analysts said they will be watching closely for at least a month or two to see if the mini-boom can last beyond the second quarter.
"Unless demand improves in the next few months, then current order rates will either flatten out or decline in Q3," Merrill Lynch analyst Dan Heyler wrote in a research note.
"It's early to gauge the magnitude of this overbuild, but we believe the next four to eight weeks will be revealing."
(US$1 = T$34.7) |
