Chip manufacturers predict a drop in profits due to falling demand from miners

Chip manufacturers predict a drop in profits due to falling demand from miners

As reported by Business Times, a company from Taiwan Semiconductor Manufacturing Co. (TSMC), a leading manufacturer of microchips, has lowered its projected income due to the slowdown in the smartphone industry and cryptocurrency. TSMC produces chips for giants such as Nvidia Corp., Apple Inc. and Qualcomm Inc.

TSMC has lowered the forecast of growth of revenue in 2018 from 10 percent to 9 percent and also reduced the expected capital cost to 10-10. 5 billion from 11.5-12 billion US dollars. According to analysts, the company may experience a slowdown in demand for high-end chips used in the cryptocurrency industry, because the miners to choose the cheaper chips because of the price volatility and tightening regulatory norms in the industry.

For the first and second quarters of TSMC recorded a 9 percent increase in net profit compared to the previous year to 2.3 billion US dollars. Sales in the personal computer industry made up 21 percent of total revenue, which is 12 percent more than in the previous year. Revenue increased by 11 percent and made up 7.85 billion. A copy of the company’s forecast made in April.

As stated by chief financial officer of TSMC Lora Ho, the company expects to “benefit from new product launches, while demand from miners will decrease since the second quarter”.

TMSC previously lowered its revenue estimate in April, with growth from 15% to 10%. The company announced that the demand for the first quarter from the development of cryptocurrency systems have been strong and may continue in the second quarter, but the company expected the potentially weaker demand in the product line-28 nm, used for the equipment of the cryptocurrency.

We have previously reported that the price of graphics card (GPU) decreases with a fall in the price of the cryptocurrency markets.

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