Downturn Hits Taiwan's Foundry Chip Makers

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Sales for the month of November slowed for the world's two largest contract chip makers as the global economic downturn bites the semiconductor industry.

Taiwan Semiconductor Manufacturing (TSMC) on Wednesday reported its worst monthly sales result in over three years.

November consolidated sales at the world's largest contract chip maker fell to NT$20.6 billion (US$615.2 million), down 34 percent compared to the same month last year and 30 percent lower than October.

The company's main rival in the foundry chip business, United Microelectronics (UMC), reported net sales in November fell to NT$6.02 billion, down 33 percent compared to the same month last year and lower than October's NT$7.91 billion.

UMC also lowered its fourth quarter earnings guidance, blaming weak chip demand on global economic woes.

The chip maker lowered its fourth quarter revenue target to between NT$18.2 billion and NT$18.7 billion from a mid-point of NT$19.5 billion previously. The company also reduced its gross profit margin target to between 7 percent and 9 percent.

TSMC lowered its fourth quarter financial guidance last week.

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