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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  Samsung Electronics Co., Ltd.    A005930   KR7005930003

SAMSUNG ELECTRONICS CO., LTD.

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TSMC sees Q2 sales dip after key client loses business

04/16/2015 | 06:49am EST
Investors sit in front of the logo of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) during an investors' conference in Taipei

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (>> Taiwan Semiconductor Mfg. Co. Ltd.) on Thursday said revenue is likely to fall in the second quarter from the first, due in part to the loss of business at one of its key customers.

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (>> Taiwan Semiconductor Mfg. Co. Ltd.) <TSM.N> on Thursday said revenue is likely to fall in the second quarter from the first, due in part to the loss of business at one of its key customers.

The world's largest contract chip manufacturer expects a decline of 7 percent to 8 percent in April-June. In the three months prior, revenue was flat on quarter but grew 50 percent on year, pushing net profit beyond analyst estimates.

The forecast comes a week after rival Samsung Electronics Co Ltd (>> Samsung Electronics Co Ltd) said it used its own chips in its just-released flagship smartphone instead of chips from Qualcomm Inc (>> QUALCOMM, Inc.), which contracts a large share of its production to TSMC.

"A key customer's business loss to an IDM ... will negatively impact our business," TSMC Chief Financial Officer Lora Ho said in a quarterly analyst conference, without identifying the IDM or the customer.

IDM refers to companies like Samsung which both design and manufacture chips, unlike TSMC which only manufactures them.

The development follows TSMC's presumed loss of orders to Samsung for chips for Apple Inc's (>> Apple Inc.) next iPhone, likely due out this year, analysts said. Estimates for TSMC's share in the handset's next iteration range from 30 percent to 50 percent, from as much as 100 percent in the iPhone 6 models.

At the lower end of the smartphone market, declining prices worldwide may drive handset makers to opt for smaller players such as Semiconductor Manufacturing International Corp (>> Semiconductor Manufacturing Int'l) and United Microelectronics Corp (>> United Microelectronics Corp.) which offer more competitive prices for less-advanced technology, analysts said.

SLOWING MARKET

TSMC said the chip industry - from design to manufacturing and testing - is likely to grow 4 percent this year, rather than 5 percent forecast in January, and that revenue growth in manufacturing alone will be more 10 percent than 12 percent.

"Emerging countries' demand for low-end smartphones is relatively weak" in the short-term, said spokeswoman Elizabeth Sun. "We're also seeing some delay in the launch of high-end phones from Android brands other than Samsung."

TSMC also sliced $1 billion from its capital expenditure plan for 2015, largely attributed to improved efficiency rather than weak demand.

For the three months through March, TSMC said net profit rose 65 percent to T$79 billion ($2.54 billion), beating the T$77.8 billion average estimate of 22 analysts polled by Reuters.

Ahead of the earnings, TSMC shares closed up 2.8 percent versus a 1.2 percent rise in the overall TAIEX <.TWII> index.

($1 = 31.1200 Taiwan dollars)

(This version of the story adds revenue outlook, industry outlook, executive comments)

(Editing by Christopher Cushing)

By Michael Gold


© Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. 0.29% 123.08 Delayed Quote.67.17%
QUALCOMM, INC. -0.42% 149.98 Delayed Quote.71.44%
RISE, INC. 0.00% 24 End-of-day quote.-20.00%
SAMSUNG ELECTRONICS CO., LTD. 2.51% 69500 End-of-day quote.24.55%
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION 3.49% 22.25 End-of-day quote.86.35%
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED 1.84% 499 End-of-day quote.50.76%
UNITED MICROELECTRONICS CORPORATION -0.24% 41.45 End-of-day quote.151.98%
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Financials
Sales 2020 238 362 B 217 B 217 B
Net income 2020 27 225 B 24,7 B 24,7 B
Net cash 2020 94 307 B 85,7 B 85,7 B
P/E ratio 2020 16,8x
Yield 2020 2,11%
Capitalization 467 400 B 424 B 425 B
EV / Sales 2020 1 960x
EV / Sales 2021 1 767x
Nbr of Employees -
Free-Float 82,9%
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Number of Analysts 40
Average target price 78 850,00 KRW
Last Close Price 69 500,00 KRW
Spread / Highest target 43,9%
Spread / Average Target 13,5%
Spread / Lowest Target -13,7%
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NameTitle
Hyun-Suk Kim Co-President, Co-CEO & Director
Dongjin Koh Co-President, Co-CEO & Director
Kinam Kim President, Co-CEO & Director
Tae Moon Roh Co-President & Head-Research & Development
Jae-Wan Park Chairman
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