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Taiwan Semiconductor Manufacturing ( TSM ) will grow 4% in 2016, missing projections for 5%-10% growth, as Apple ( AAPL ) cuts its iPhone 7 orders June through December, a source told the Nikkei Asian Review on Wednesday. Nikkei’s report comes on the heels of disappointing June-quarter guidance from Apple suppliers Skyworks Solutions ( SWKS ), Cirrus Logic ( CRUS ) and InvenSense ( INVN ). Tuesday, TSM reported Q1 sales that missed by $30 million and dipped 13% year over year. In afternoon trading on the stock market today , Taiwan Semi stock was down a fraction, near 23. June through December, TSM’s chip shipments will shrink to 70%-80% of year-earlier levels, sources told Nikkei. TSM is now projected for “tepid” 4% year-over-year sales growth and flat operating profits in 2016. In 2015, sales rose 7.5% to $25.95 billion. “Suppliers are saying that they are getting fewer orders for the second half of this year compared with the year-ago period,” a source told Nikkei. “The traditional peak season this year will not be able to compare to the past few years.” The report jibes with worries of a slowdown in smartphone sales. Last month, Apple missed its March-quarter Q2 sales for the first time in 13 years and guided its June-quarter sales down 15%-19% sequentially, which is the seasonal norm. The only Chinese smartphone makers showing healthy growth are Huawei and Oppo, the source said. Apple CEO Tim Cook has said his company plans to lower its channel inventories by $2 billion in the June quarter “in light of the macroeconomic environment.” Apple has tapped TSM as the sole source of its A10 processor for the iPhone 7, expected for release in September. Last year, TSM and South Korean rival Samsung both supplied the A9 processor for the iPhone 6S. About 16% of TSM’s sales stem from Apple. Nikkei estimates Apple will ship more than 200 million iPhones this year, down from 230 million in 2015. A source with a major Taiwanese supplier blamed the lack of innovation in the iPhone 7 for the weak demand, Nikkei reported. Scalper1 News
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