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Asia300

Taiwan IT companies hurt by sluggish iPhone-related sales

Total revenue slides again in November, but non-Apple fields gain

Taiwan Semiconductor Manufacturing Co. enjoyed its second-highest monthly revenue ever in November.

TAIPEI -- Taiwanese companies seen as a bellwether for the global information technology industry are struggling to boost earnings, as gains in semiconductors and LCD panels fail to offset weak sales of iPhone-related products.

November revenue for 19 leading Taiwanese IT businesses totaled 1.11 trillion New Taiwan dollars ($34.9 billion), down 0.04% from the same month a year earlier. Though the dip was smaller than the 6.4% decrease for October, sales declined year over year for a third straight month. Revenue grew at 11 of the companies, four more than in October.

Taiwan Semiconductor Manufacturing Co., the world's largest chip foundry, saw revenue soar 46.7% to NT$93 billion. The company achieved its second-highest monthly total ever, despite November not being the heaviest month for shipments of smartphone-related products. In addition to being the exclusive foundry for processors used in Apple's iPhone 7, TSMC also benefited from sales of non-smartphone products such as graphics processing units for Nvidia.

Total revenue at five semiconductor-related companies jumped 27.4%. Revenue rose 18.9% at DRAM producer Nanya Technology, while design and development specialist MediaTek maintained its strong performance thanks to demand from China for low- and medium-priced smartphones.

But companies involved in iPhone production struggled, with only three of the nine in that segment -- including TSMC -- increasing revenue. The cumulative decline was 1.2%, or 4.7% for the eight companies excluding TSMC.

Hon Hai Precision Industry, the world's largest electronics manufacturing services provider, logged a 7.1% drop in revenue, down for the second straight month. Sales declined 8.8% at optical lens manufacturer Largan Precision, while plunging 39% at touch panel producer TPK Holding.

Samsung Electronics' decision in October to halt production and sales of its new Galaxy Note 7 smartphone was widely expected to spur iPhone sales. But the revenues at iPhone-related Taiwanese companies suggest that any benefits from the South Korean electronics giant's missteps have yet to be seen.

Markets have begun improving in several fields, unlike last year when the industry was hit by a slowdown in China's economy and sluggish iPhone sales. For example, DRAM unit prices have rallied. In the field of liquid crystal display panels, revenue at Hon Hai affiliate Innolux rose 14.6% thanks to growing demand for large-screen TVs in the emerging nations of Southeast Asia and elsewhere. AU Optronics also managed a 6.2% revenue gain. These companies may have benefited from reduced supply by Samsung in preparation for a technology switch-over.

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