Smartphone demand collapse hits foundry orders

The collapse in demand for smartphones has caused a severe drop in foundry orders for mobile SoCs.

TSMC saw sales drop from $2.48 billion in July to $2.06 billion in August – a fall of over 17%.

At UMC August sales were down 4% and the company said its Q3 wafer shipments may fall sequentially by as much as 5%, while its ASP may fall 3%.

The reason given by both companies is excessive inventory in the mobile SoC supply chain which made customers cut back on orders.

It was the third lowest monthly sales figure for TSMC this year after February’s $1.9 billion and June’s $1.84 billion.

In the first eight months of the year TSMC had sales of $17.6 billion – 23.6% more than in the first eight months of 2014.

TSMC says Q3 sales will be between $6.33 billion and $6.42 billion.

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