Shares of the world’s largest contract semiconductor manufacturer, Taiwan Semiconductor Manufacturing Co. (TSMC), rose on news of earnings growth at one of its main rivals – South Korea’s Samsung.
Whilst trading in Taipei, TSMC shares rose 5.4% after Samsung released its official guidance that the company’s second-quarter operating profit rose 11.4%, better than previously forecast.
Samsung’s strong performance indirectly suggests that the second-quarter market slowdown may be less painful than expected for high-tech manufacturers. Simply put, when Samsung is doing well, TSMC is doing well too.
While Samsung’s detailed quarterly report will be released later this month, the company expects second-quarter operating income to rise 11.4% to $10.7 billion and revenue to rise 20.9% to $59.2 billion US dollars. Market experts have even more optimistic forecasts. Although Samsung’s revenue and earnings actually declined compared to the prior-year second quarter, they rose 2.8%, and with them the company’s share price.