Chip sales at TSMC, the world’s largest chip maker, have dropped sharply over the past month. Apple’s main chip supplier thus failed to meet analysts’ expectations for the second consecutive quarter. Experts see the figures as a sign of continued weakness in global electronics demand.
The Taiwanese group reported a drop in revenues of more than 15% last month compared to March last year. Compared to February of this year, this was a drop of almost 11%. Looking at the full first quarter, sales still rose just under 4% to $16.7 billion, but analysts were expecting better numbers.
The chip industry faces uncertainty around demand for electronics as the economic outlook deteriorates and many consumers struggle with rising costs. Also, the trade war between the US and China is affecting the sector. Last year, the United States introduced further restrictions on the export of technologically advanced semiconductors to the Asian country. Meanwhile, TSMC is expanding beyond its home country of Taiwan to accommodate customers looking to buy chips more broadly around the world.
It is not yet known what exactly the new profit figures mean. TSMC, which is a major customer of Dutch chip machine maker ASML, won’t reveal it until later. Despite disappointing sales, record profit was achieved in the previous quarter. This was due to the company’s economies of scale and its technological edge over many competitors.
TSMC has already scaled its investment plans for this year to between $32 billion and $36 billion. This means a decrease from the more than 36 billion last year. TSMC executives said in January they expect the company’s sales to likely decline in the first half of this year, but business should recover after that.
Source: BNR
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