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Key Points

Taiwanese semiconductor firms like MediaTek are bracing for a weaker third quarter as US tariff uncertainties disrupt normal seasonal demand patterns. Clients rushed orders earlier this year to avoid potential duties, leaving little room for traditional Q3 growth. The Taiwan dollar's appreciation has further squeezed export revenues, though TSMC remains optimistic due to AI-related demand. While most chipmakers face headwinds, TSMC stands out with projected 8% quarterly growth and bullish 2025 forecasts.

Key Points: Taiwan Chipmakers Face Q3 Slowdown as US Tariffs Bite

  • MediaTek warns of 7-13% Q3 revenue drop due to tariff-driven early orders
  • US delays tariff rollout but threatens 100% semiconductor duty
  • Strong Taiwan dollar adds pressure on exporters' earnings
  • TSMC defies trend with 8% Q3 growth forecast from AI demand
2 min read

Taiwan's semiconductor firms brace for weaker Q3 amid tariff pressures

MediaTek and other Taiwanese semiconductor firms brace for weaker Q3 revenue amid US tariff pressures and currency fluctuations, while TSMC bucks the trend.

"Customers front-loaded purchases to avoid potential tariffs – MediaTek Inc."

Taipei, August 11

Several semiconductor firms in Taiwan are approaching the third quarter with caution, despite traditionally Q3 being a high-demand period, as US tariff moves cloud the industry outlook.

As per a report by Focus Taiwan, smartphone IC designer MediaTek Inc. said the rush of orders from clients in the first half of the year, triggered by fears over US tariffs, has left little room for the usual seasonal spike in demand. "Customers front-loaded purchases to avoid potential tariffs," the company noted, warning that third-quarter revenue could fall by 7 to 13 per cent from the previous quarter, landing between NTD 130.1 billion (4.35 billion USD) and NTD 140 billion (4.68 billion USD).

The US tariff plan, announced April 2, initially proposed a steep 32 per cent duty on Taiwanese goods. The rollout was delayed twice, eventually setting a 20 per cent rate that took effect Friday. More uncertainty arrived when US President Donald Trump said on Wednesday that a 100 per cent tariff on imported semiconductors is on the table; however, manufacturers with US operations could be exempt.

Other Taiwanese chipmakers share similar worries. PixArt Imaging Inc., a sensor chip designer known for components used in computer mice, said clients had also placed large orders earlier this year but demand is now set to slow. Display driver IC maker Novatek Microelectronics Corp. reported that its customers have turned more cautious about new purchases.

The report further stated that the Taiwan dollar appreciated 10.97 per cent against the US dollar in the second quarter, ending June. The stronger currency hit export revenues and triggered foreign exchange losses for several companies. While the Taiwan dollar has eased slightly in the current quarter, it is expected to remain stronger than last quarter's average, keeping pressure on earnings.

One notable exception to the downbeat tone is Taiwan Semiconductor Manufacturing Co. (TSMC). The world's largest contract chipmaker expects robust demand for artificial intelligence applications to lift its third-quarter revenue by 8 per cent from the second quarter, based on an exchange rate of NTD 29 to one U.S. dollar. For 2025, TSMC projects 30 per cent revenue growth in U.S. dollar terms, nearly double the 15.4 per cent rise forecast for the global semiconductor industry.

- ANI

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Reader Comments

P
Priya S
The US tariffs are really disrupting global supply chains 😕 My husband works at an electronics manufacturing unit in Noida and they're already seeing delays in component shipments. Hope this gets resolved soon!
A
Aman W
TSMC's performance shows that quality and innovation still win in the long run. Indian companies should learn from their R&D focus rather than just chasing short-term profits.
S
Sarah B
As someone working in tech procurement, this is giving me nightmares! The 100% tariff threat is insane - it would make smartphones and laptops unaffordable for most Indians. Hope better sense prevails in Washington.
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Vikram M
The currency fluctuation impact is something our RBI should study carefully. When rupee appreciates, our IT exports suffer similarly. Need better hedging strategies for Indian tech firms.
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Kavya N
While the article focuses on business impact, we must remember thousands of jobs are at stake here - both in Taiwan and in countries like India that depend on their chips. Policy makers need to think about workers too.

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