TSMC failed to meet analysts’ revenue forecasts. This was the second quarter in a row, reflecting the continued decline in global demand for electronics.

According to Bloomberg, TSMC’s revenue in the first quarter of 2023 was NT$508.6 billion ($16.7 billion), below the average analyst forecast of NT$525.5 billion. The reason for this was a sharp decline in income in March. Sales last month fell 15% from a year earlier to NT$145.4 billion.

Such a situation suggests that the decline of the semiconductor industry is far from over. The fact is that rising interest rates, rising inflation and the ongoing banking crisis are affecting consumer sentiment. Global PC shipments fell 29% in the first quarter, driven primarily by Apple’s Mac line, according to the latest IDC data. TSMC is a contract chip manufacturer for many computer and consumer electronics manufacturers. Therefore, the decrease in demand in these markets automatically affects the volume of orders for the production of chips.

Given the crisis, TSMC adjusted its capital investment plans for this year from $36.3 billion to a range of $32-36 billion. In January, the company’s management said that it expects sales in the first half to decline by a single-digit percentage in dollar terms, but in the second half the business will revive

Rival Samsung plans to cut memory production amid its biggest drop in quarterly profit since 2009.

In addition, in addition to the decline in demand for electronics, TSMC’s business is also under pressure from the political situation. The company is forced to manufacture its advanced chips abroad and is building capacity in the US and Japan. Global politicians and consumers are increasingly wary of technological dependence on Taiwan, which could become a victim of mainland Chinese aggression.

Source: Bloomberg