* Demand from cryptocurrency expected to soften in H2
* Sees high-performance chips contributing more to 2018
* Q2 profit T$72.29 bln vs T$71.895 bln analyst view
* Q2 revenue in line with company forecast
(Adds quotes, context)
By Yimou Lee and Jess Macy Yu
TAIPEI, July 19 (Reuters) – Taiwan Semiconductor
Manufacturing Co Ltd (TSMC), the world’s largest
contract chipmaker, trimmed its annual revenue and capital
spending estimates on bleak demand from smartphone and
cryptocurrency mining industries.
This is the second time the company has lowered its revenue
outlook this year, from an initial forecast for record sales,
indicating a continued sluggishness in the crypto-sector amid
increased regulatory scrutiny and as miners switch to
lower-powered chips due to price volatility.
Revenue will likely grow in the high single-digit rate as
demand from cryptocurrency is expected to soften in the second
half of the year, TSMC said. This compares to a prior forecast
for a 10 percent growth and an initial up to 15 percent view.
TSMC, however, was still bullish on high-performance chips
and was betting on quick-growing fields such as artificial
intelligence to make up for some of the slack in demand.
Revenue from these will account for about a quarter of its
full-year revenue, up 40 percent, it said.
“We anticipate our business will benefit from new product
launches … while cryptocurrency mining demand will decrease,”
CFO Lora Ho told analysts on Thursday.
The company said it will continue to increase the production
of its next generation of chips, known as 7nm, and expects these
to contribute more than 20 percent to its revenue next year.
For the second quarter ended June, TSMC’s revenue rose 11
percent to $7.85 billion, the middle of the $7.8-$7.9 billion
range it had forecast in April. Sales to the personal computer
industry accounted for 21 percent, from 8 percent a year ago.
Revenue from the communications sector that includes
smartphones fell to 48 percent from 58 percent.
Its net profit over the period rose 9 percent rise to
T$72.29 billion ($2.36 billion), in line with estimates.
An intensifying U.S.-China trade spat could be near-term
risks for TSMC, analysts said, adding many of TSMC’s biggest
clients are in the mainland.
Its revenue from China jumped 23 percent from 11 percent a
year earlier, although North America remains its biggest market
accounting for 53 percent of total revenue.
TSMC trimmed its capex estimate to $10-10.5 billion from
$11.5-12 billion for the year, citing a rescheduled payment and
a stronger U.S. dollar.
Prior to the earnings announcement, shares in TSMC closed up
0.67 percent versus a flat wider market. The stock has
slipped less than 1 percent so far this year.
($1 = 30.5070 Taiwan dollars)
(Reporting by Yimou Lee and Jess Macy Yu; Editing by
Christopher Cushing and Himani Sarkar)