TSMC says fundamentals sound despite Intel chill
TAIPEI, Sept 23 (Reuters) - Morris Chang, chairman of Taiwan Semiconductor Manufacturing Co (TSMC) , cited sound fundamentals on Saturday and called for confidence in its shares which have been dragged down by Intel's revenue warning.
``Our fundamentals are better than before. Demand far exceeding supply is more serious than in the past,'' Chang told reporters. His comments were broadcast on cable network TVBS.
World number one chipmaker Intel's (NasdaqNM:INTC - news) first sales warning in two years sent Taiwan's electronics shares tumbling on Friday with world foundry leader TSMC falling its daily seven percent limit to T$106.5.
Intel said on Thursday its third-quarter revenues would be below forecast, and now sees only a three to five percent rise from second quarter sales.
Slower sales of the U.S. chip firm's market-dominating microprocessor also imply fewer personal computer shipments, as well as peripherals and memory chips that go into PCs.
Chang played down worries linked to the Intel warning, saying TSMC's production related to PCs were less than 40 percent and urged investors to focus on long-term investments.
The Intel news sent Taiwan's benchmark TAIEX (^TWII - news) tumbling 4.46 percent to end at a fresh 18-month low on Friday with many stocks dropping the seven percent daily trading limit.
The Taiwan main stock index has fallen 21.7 percent so far this year and was down 35 percent from a year high of 10,202.20 points marked on February 17.
On Friday, Finance Minister Shea Jia-dong said there was no need for Taiwan investors to ``dance to the tune of foreign funds''.
``The sharp fall in the stock market is just a short-term phenomenon. Investors can start thinking about whether it's time to pick up cheap stocks,'' the Commercial Times quoted Shea as saying in parliament.
Shea said the TAIEX would not tumble to 3,000-4,000 points when asked by an opposition lawmaker whether the index would fall to that level.
Foreign investors sold a net T$5.288 billion in local shares on Friday, taking their total net selling over the last six sessions to T$14.422 billion.
(US$1 equals T$31)
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No problems here, says European chipmaker Infineon
By Bloomberg News
September 22, 2000, 12:35 p.m. PT
MUNICH, Germany--Infineon Technologies, Europe's No. 3 chipmaker, said it expects sales growth this quarter to exceed that of the semiconductor industry overall.
The chipmaking arm of Siemens made the forecast a day after Intel, the world's largest computer-chip maker, warned of weak demand in Europe and lower-than-expected sales. Infineon expects to outperform the industry and turn in record profit in the fourth quarter, said chief executive Ulrich Schumacher.
"We see extremely strong growth before us," Schumacher said in an interview. "It's an absurd discussion. There's no slowdown at all."
Infineon focuses on memory chips, or DRAM, for computers and other electronic devices and microprocessors for communications equipment. Intel is the world's largest producer of microprocessors that drive personal computers and other consumer electronics. It faces increasing competition from rivals such as Advanced Micro Devices.
"It's more of an Intel problem, with AMD catching up," said Boris Boehm, a fund manager who helps manage $7.76 billion (9 billion euros) of equities at Nordinvest in Hamburg.
Infineon said it is building new DRAM factories in Dresden, Germany, Taiwan and the United States. The company said it is the only one boosting DRAM capacity. Its main competitors include STMicroelectronics, Hyundai and Samsung.
"As far as I know, the rate of growth is predicted to be 25 percent for the semiconductor industry next year," Schumacher said. "Infineon will exceed that."
STMicroelectronics and Royal Philips Electronics, Europe's biggest semiconductor makers, have both said they expect market growth of 30 percent next year and that they expect to beat that. San Jose, Calif.-based SIA predicted market growth will slow to 25 percent in 2001 and 14 percent in 2002.
Still, some analysts are skeptical as to the ability of chipmakers to forecast growth accurately.
Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray, recommends Infineon's comments "be taken with a bucket of salt." Jaffray predicted a PC slowdown two weeks ago.
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Texas Instruments sees chip sales growth strong
(UPDATE: adds share price, CFO quotes, background)
By Marcus Kabel
DALLAS, Sept 22 (Reuters) - Texas Instruments (NYSE:TXN - news), trying to distance itself from a sell-off in semiconductor stocks sparked by Intel Corp. (NasdaqNM:INTC - news), on Friday emphasised it had limited exposure to the personal computer market and maintained its forecasts for third quarter revenue growth.
Intel warned on Thursday that third-quarter sales would disappoint, sparking fears that world demand for personal computers was flattening and that tech firms' earnings growth would slow.
But Dallas-based Texas Instruments, the world's No. 1 maker of computer chips for wireless phones and high-speed modems, said its specialised markets continued to boom.
``We believe that where we stand now is consistent with our expectations earlier in the quarter that semiconductor revenues will grow sequentially (quarter to quarter) faster than the 6 percent rate in the second quarter,'' Texas Instruments' Chief Financial Officer Bill Aylesworth told Reuters.
Aylesworth also said sales to its core wireless phone market, which accounts for 24 percent of its chip sales, would grow at the same level or somewhat faster than the 3 percent sequential increase recorded last quarter.
Shares of Texas Instruments were down 3.05 percent or $1-3/4 at $55-9/16 at 3:13 pm (EDT) on the New York Stock Exchange, off an intra-day low of 53-7/8. The shares have moved between $37-7/8 and $99-3/4 in the past year.
``Our business in digital signal processors and analogue chips is highly oriented toward digital communications and broadband communications to the Internet, and those markets continue to be strong for us,'' Aylesworth said.
The biggest issue facing the company right now was increasing capacity fast enough to keep up with demand, he added. The company said in July it was raising capital expenditures to $2.8 billion from $2.5 billion this year for production capacity to keep up with demand.
Aylesworth said unlike Intel's, Texas Instrument's business in the personal computer market was limited, with semiconductors for hard disk drives making up 6 percent of revenues.
Earlier this week the company slightly cut its forecast for wireless handset sales this year from 435 million but Aylesworth said the lower figure would still be a 65 percent increase from just over 260 million handsets sold in 1999.
Future growth will be fuelled by so-called ``third generation'' mobile phones capable of high-speed data transfer and Internet connections, he said.
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Dell says PC market still strong
AUSTIN, Texas, Sept 22 (Reuters) - Dell Computer Corp. (NasdaqNM:DELL - news) Chairman and Chief Executive Michael Dell said on Friday the company has seen no change in what it views as a strong personal computer market, despite Intel Corp.'s (NasdaqNM:INTC - news) warning of slower revenue growth in the third quarter.
``We haven't really changed our view of the market from our second quarter conference call,'' he told Reuters at Dell DirectConnect, a conference for Dell customers.
He said Dell, the world's No. 2 computer maker, stood by its forecast that revenues would grow by 30 percent for the full year.
``We believe 30 percent is very achievable,'' he said. On Thursday, Dell said demand for personal computers was ``healthy,'' and that an expected component shortage had not developed.
Intel cited weakness in European demand as a factor in its slowdown, but Dell said he was expecting its sales to increase year over year in the third quarter.
``This whole issue of the Euro is clearly an issue for companies that sell in Europe, (but) we're growing faster than the market in Europe. We're gaining share,'' he said.
``The second quarter (overall) in Europe was down year-over-year and we were up -- and we're expecting our business will be up in Europe again in the third quarter, even though the market may not be up,'' Dell said.
Dell's third-quarter sales in Europe last year were about $1.3 billion, a company spokesman said. Sales were up 10 percent, year over year, in the second quarter this year. |
