Taiwan Semiconductor Manufacturing Company (TSMC), at its July 16 investors meeting, gave a less-optimistic outlook for the third quarter of 2015, and has revised downward its forecast for 2015 global semiconductor and foundry growth.

TSMC co-CEO Mark Liu indicated the company now forecasts the global semiconductor market will grow 3% in sales in 2015, and the foundry segment will see a 6% increase. TSMC previously estimated sales in the global foundry market would rise 10% in 2015, and the overall chip sector 4%.

Nevertheless, TSMC reiterated its target of double-digit growth in 2015 sales, Liu said.

"The end market recovery is not as strong as was expected earlier; customers continue to remain cautious in inventory management. Combining these factors with customers' product transition, demand for TSMC wafers in the third quarter is expected to recover only modestly," said company CFO Lora Ho.

TSMC forecast its consolidated revenues for the third quarter of 2015 will be between NT$207 billion (US$6.65 billion) and NT$210 billion, representing growth of up to 2.2% on quarter.

Global demand for smartphones has decelerated significantly. Inventory levels particularly in China were already high in the first quarter of 2015, but have reduced 50%, TSMC noted. However, excess inventory at handset companies might not be able to ease until the fourth quarter of the year, TSMC said.

TSMC saw its second-quarter revenues decrease 7.5% sequentially but meet its guidance. In the second quarter, TSMC's business was negatively impacted by customers' cautious inventory management and a less favorable exchange rate, Ho noted.

Sales generated from the communication sector accounted for as high as 62% of TSMC's total wafer revenues in the second quarter of 2015.