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TSMC striving to cut costs
Source: DIGITIMES   Editor: Helan   Update Time :2019/1/29 16:40:50

Taiwan Semiconductor Manufacturing Company (TSMC) is striving to cut its operating costs this year, and has been in talks with its equipment and materials suppliers about lowering prices by as much as 10%, according to industry sources.

TSMC has seen its customers slow down their pace of orders indicating a weak first half of 2019, said the sources. While encouraging its fabless clients to place their orders in advance, the foundry also intends to negotiate lower prices with its equipment and materials suppliers, the sources noted.

Among the suppliers, those that are not engaged in factory process equipment are being requested to adjust downward their quotes with TSMC by 10%, the sources noted. Meanwhile, Taiwan-based suppliers specializing in equipment materials, such as Chunghwa Precision Test Tech (CHPT), Gudeng Precision Industrial and Marketech International, are being demanded to cut prices by 8-10%, the sources said.

TSMC is also negotiating prices favorable to the foundry with its international equipment suppliers, including Applied Materials, Lam Research and ASML, the sources continued.

On the other hand, TSMC appears to have failed in its price negotiation with its silicon wafer suppliers, such as GlobalWafers, the sources suggested.

TSMC has responded saying it does not comment on speculation about either customer orders or contracts with its suppliers.

TSMC at its investors meeting earlier this month (January 2019) estimated an over 20% sequential fall in first-quarter revenues. The foundry also gave a less optimistic revenue outlook this year with an increase of only up to 3%.

Rising global economic uncertainty, a slowdown in China's economy, and most importantly weakness in the iPhone and overall smartphone sales, are regarded as the major factors behind TSMC's dim business outlook this year, according to industry observers.

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