Taiwan chipmaker announces investment cuts amid projected 5% drop in revenue

Taiwan-based chipmaker TSMC warned that first-quarter revenue will fall 5% and annual investment will decline as major supplier Apple Inc expects demand to fall due to a slowing global economy.

The bearish outlook follows a 78% jump in fourth-quarter earnings, highlighting the depth of a sharp slowdown in the global technology sector, which is struggling with deteriorating consumer demand caused by high inflation, rising interest rates and an economic slowdown.

Still, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s most expensive chipmaker, predicts growth will resume in the second half of this year.

“We predict the semiconductor cycle will bottom out somewhere in the first half and see a recovery in the second half of 2023,” said CEO Xi Xi Wei, adding that new product launches such as artificial intelligence products will drive the recovery.

The world’s largest contract chip maker said its capital spending in 2023 will drop to $32-36 billion from $36.3 billion in 2022.

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