European semis in the read after TSMC's chilly outlook

Osram Licht AG

20/07/2023 11:40

(Adds more analyst comment, updates shares)
        ** 
    Gloomy outlook
     from the Taiwanese chipmaker TSMC  2330.TW  has a chilling
effect on European semiconductor stocks on Thursday, with the
STOXX tech index  .SX8P  falling around 2% in early afternoon
trade
        ** The index heads for its biggest one-day decline in
three weeks, and is the worst performing sector in Europe
  
    ** TSMC, the world's largest contract chipmaker, estimates
investment spending for this year at the lower end of a previous
guidance of $32-$36 billion and a drop in 2023 sales
    ** Needham's analyst Charles Shi says TSMC's results suggest
that the recovery of semiconductor industry will likely be slow
and "U-shaped", which means it could take more time than
anticipated
        ** "The slower-than-expected recovery suggests
macroeconomic headwind remains strong, especially in regions
such as China, where the consumer demand had been driving global
semiconductor growth for years", he adds 
  
    ** Shares in ASML Holding  ASML.AS , ASM International
 AMI.AS , BESI  BESI.AS , Soitec  SOIT.PA , STMicroelectronics
 STMPA.PA , Infineon  IFXGn.DE , ams-Osram  AMS.S , Siltronic
 WAFGn.DE  fall between 1%-5% at 1040 GMT    
    ** "(European chipmakers) ... are struggling to find more
upside from here," Chris Beauchamp, chief market analyst at IG
Group, says
    ** "If we can see demand picking up from a lot of computer
makers that could give the sector a bit of lift," Beauchamp adds
    ** Heavy chip-users in U.S. also disappoint with software
provider IBM's  IBM.N  lower-than-expected sales and Tesla's
 TSLA.O  lower quarterly gross margin
    

 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))