Taiwanese chipmaker TSMC warned on Thursday that first-quarter revenue would drop as much as 5% and it would slash annual investment as the major Apple Inc supplier expects softer demand due to a slowing global economy.
The bearish outlook follows a forecast-beating 78% jump in fourth-quarter profit, underscoring the depth of a sharp slowdown in a global technology sector that is grappling with worsening consumer demand brought about by decades-high inflation rates, rising interest rates and an economic downturn.
The world's largest contract chipmaker said its capital expenditure in 2023 would decrease to $32-36 billion from $36.3 billion in 2022. "Given the near-term uncertainties, we continue to manage our business prudently and tighten up our capital spending where appropriate," Huang said. "Our disciplined capex and capacity planning remain based on the long-term market demand profile."
It reiterated on Thursday slower demand was a cyclical issue and 2023 overall would be a slight growth year for the company. TSMC late last year began construction of a second chip factory in Arizona which will start production in 2026, using advanced 3 nm. Its total investment in the U.S. project amounts to $40 billion.
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