Taiwan Semiconductor Manufacturing Co. missed sales estimates for the second consecutive quarter in a sign of continued weakness in global electronics demand.
(Bloomberg) — Taiwan Semiconductor Manufacturing Co. missed sales estimates for the second consecutive quarter in a sign of continued weakness in global electronics demand.
First-quarter revenue at the world’s biggest contract manufacturer of chips was NT$508.6 billion ($16.7 billion), according to Bloomberg calculations, falling shy of average analyst forecasts of NT$525.5 billion. A sharp slowdown in March contributed to that miss: sales were down 15% last month relative to the prior year, at NT$145.4 billion, TSMC said.
The shortfall suggests that the slump in the chip industry has yet to bottom out, as rising interest rates, surging inflation and the ongoing banking crisis continue to dent consumer sentiment. Global PC shipments crashed by 29% in the first quarter, led by Apple Inc.’s Mac lineup, according to the latest IDC figures. TSMC relies on Apple, other PC makers and consumer electronics brands like Nintendo Co. to keep its sales churning.
TSMC has slashed its capital spending plans for this year to a range of $32 billion to $36 billion, down from $36.3 billion last year. Executives said in January that they expect the company’s sales in the first half to decline by a mid-to-high single-digit percentage in US dollar terms, but that business would pick up in the second half.
Read more: Apple’s 40% Plunge Leads PC Shipments Down as Tech Demand Sags
Rival Samsung Electronics Co. is also cutting its memory chip output after reporting its lowest quarterly profit since the 2009 financial crisis.
Shares of Hsinchu-based TSMC, Taiwan’s most valuable company, are up about 18% this year after shedding 27% last year. The global economic slowdown has crimped consumer appetite for many products that use TSMC chips, but the company and its customers expect long-term electronics demand to continue to rise.
TSMC is under pressure to produce its advanced chips abroad and is building more capacity in the US and Japan. Global policymakers and customers are increasingly wary of their technological reliance on Taiwan, which Beijing has claimed is part of China.
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