World’s largest chipmaker TSMC misses sales forecast as demand falters

(Bloomberg) — Taiwan Semiconductor Manufacturing Co. posted its first quarterly revenue decline in two years, signaling a global slowdown in electronics demand is starting to catch up with the chip giant.

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The shortfall suggests that even TSMC, with its advantages of technology and scale, cannot escape a global slowdown in spending as consumers are hit by rising interest rates and rising inflation. The world’s largest contract chipmaker last year slashed its capital spending plan by about 10 percent to $36 billion, and some analysts have warned that it could continue to delay spending on openings. wide by 2023.

TSMC, Apple Inc.’s exclusive supplier of Silicon chips for iPhones and Macs, may also have been affected by problems at the US tech giant’s assembly operations in China. Apple was forced to cut production estimates after Covid-related chaos at a factory in Zhengzhou exposed holes in the company’s supply chain.

Fourth-quarter revenue at TSMC jumped 43% to NT$625.5 billion ($20.6 billion), according to Bloomberg calculations based on monthly figures reported by TSMC. That missed the NT$636 billion average that analysts predicted. TSMC said its December revenue increased 24% to NT$192.6 billion.

Shares of Hsinchu-based TSMC, Taiwan’s most valuable company, fell 27% last year — after doubling during the pandemic — and are up about 8% this year. The global economic downturn has reduced consumer demand for many products using TSMC chips, but the company and its customers still expect the long-term trend in electronics demand to continue to increase.

Last month, TSMC began mass production of next-generation chips and increased its investment in the US state of Arizona to $40 billion.

Biden joins Tim Cook to praise TSMC’s $40 billion US chip venture

TSMC is under pressure to diversify the geographic distribution of its cutting-edge chip production and is working with governments like the United States and Japan to develop a more global footprint. Policymakers and global customers are increasingly worried about their technology dependence on an island that Beijing threatens to invade and has pushed TSMC to move some of its manufacturing operations overseas. .

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