Taiwan Semiconductor Manufacturing Co. (TSM) - Get Report , a key supplier to tech giant Apple Inc. (AAPL) - Get Report , posted weaker-than-expected second quarter earnings Thursday and softer third quarter guidance amid signs that smartphone chip demand could be slowing.

TSMC said net profit for the three months ending in June fell 8.6% from the same period last year to T$66.27 billion, missing the Thomson Reuters estimate of T$68.44 billion. Revenue for the quarter fell 3.6% to T$213.86 billion, the company said, although on a U.S. dollar basis that figure rises 3.2% from the same period last year to just over $7 billion.

"In addition to supply chain inventory management and mobile product seasonality, the continuing unfavorable exchange rate further impacted our second quarter business," said Lora Ho, SVP and Chief Financial Officer of TSMC. "Moving into third quarter, we expect our business will benefit from new product launches of TSMC 10-nanometer mobile devices."

TSMC sees third quarter revenue of between $8.12 billion and $8.22 billion, the company said, a figure that falls short of the market consensus of around $8.6 billion.

Earlier this week, Hon Hai Precision, the listed parent of iPhone manufacturer Foxconn, reported its lowest quarterly revenue -- T$315.1 billion -- even as sales rose by 3.3% over the same period last year.

However, Samsung Electronics (SSNLF) said last week that it expects to see record quarterly profits for the three months ending in June as rising demand for its memory chips and flagship Galaxy S8 boosts its bottom line.

Samsung is also expected to overtake Intel Corp. (INTC) - Get Report as the world's number one chipmaker by revenue -- a title held by the Silicon Valley icon since 1991 -- as it reaps the benefits of soaring memory chip prices and increased consumer demand for faster smartphones.

The South Korean chipmaker is estimated to have generated about $15 billion in total semiconductor sales during the second quarter, which would surpass Intel's estimated $14.4 billion in chip sales, according to semiconductor market research firm IC Insights.

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