Apple chip maker TSMC’s sales outlook disappoints as global smartphone, cryptocurrency mining demand stalls

Taiwan Semiconductor Manufacturing Co (TSMC) forecast revenue sharply below analysts’ estimates, as the sole supplier of Apple’s iPhone processors grapples with a stalling global smartphone market.

TSMC, which is also struggling with a slowdown in cryptocurrency mining demand, is expecting sales of US$9.35 billion to US$9.45 billion this quarter, short of the US$9.55 billion average estimate.

Its forecast covers a holiday season that often marks peak sales for customers including Apple, whose latest smartphones went on sale last month.

While TSMC remains the exclusive maker of iPhone processors, it is coming up against a global smartphone market that is seeing little growth, as customers take longer to replace their devices and brands fail to come up with innovative designs.

The world’s biggest contract maker of chips is also feeling the impact of volatility in digital currencies that is hurting demand for semiconductors used to mine bitcoin and other cryptocurrencies.

“The street remains overly bullish on TSMC’s outlook for the near term as the street’s forecasts may have yet to capture the weakness in demand” for chips using older technologies, Stefan Chang, an analyst at brokerage firm Maybank Kim Eng, wrote in an October 8 research note.