TAIPEI -- An executive at Taiwan Semiconductor Manufacturing Co., which supplies core processors used in Apple Inc.'s popular iPhones and to major Chinese smartphone brands including OPPO and vivo, said Wednesday that global smartphone market demand appeared "normal" and the world's largest contract chipmaker expected revenue to grow nearly 10%.
"Now market demand is looking to be normal. In February we thought demand may slide due to the (sluggish) economy, but now demand has returned to normal in the second half," TSMC Co-chief Executive Mark Liu told reporters at a semiconductor expo in Taipei.
Liu also reaffirmed the company's target of a 5-10% growth in revenue, and said that the Taiwanese chipmaker would be able to reach close to the top of the forecast range. Apple accounts for 16% of TSMC's revenue. In 2015, TSMC booked revenue of 843.5 billion New Taiwan dollars ($27.09 billion), up 10.6% from the year before.
TSMC shares closed at NT$184 on Wednesday afternoon, up 2.79%, after Liu's comment. The chipmaker's stock has gained close to 30% since the beginning of this year.
Liu's statement came hours ahead of Apple's launch event for its latest iPhone range. There has been lukewarm reception to Apple's upcoming two smartphone models due to the lack of innovative features. Major changes include a dual lens camera for the large 5.5-inch model, and the removal of the headphone jack to make room for Bluetooth earphones.
The TSMC executive told investors in an earning conference in July that his company expected to derive its growth mainly from the advanced 16-nanometer chips Apple adopts for its core processors and the migration of Chinese consumers from 3G to 4G smartphones.
Liu's more upbeat views on the smartphone market echoed earlier optimistic comments by Chief Operating Officer Tien Wu of leading Taiwanese chip assembler Advanced Semiconductor Engineering Group. Wu told reporters on Tuesday that demand in the second half of 2016 was "better than expected." ASE is a supplier for both TSMC and Apple.
Yet analysts have been conservative about Apple's performance this year. Arthur Liao of Fubon Securities forecasts that Apple will ship about 204 million iPhones this year, down from 231 million last year. Jeff Pu of Yuanta Investment Consulting estimates that the U.S. tech titan will ship a total of 201 million units of handsets for all of 2016.