TSMC reports first profit drop in 4 years as electronics demand slump continues

Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, posted a second-quarter revenue plunge Thursday as demand for shopper electronics continues to hunch.

Here are TSMC’s second quarter outcomes versus Refinitiv consensus estimates:

• Revenue: 480.84 billion New Taiwan {dollars} ($15.68 billion), vs. NT$478.83 billion anticipated
• Net earnings: NT$181.8 billion, vs. NT$172.55 billion anticipated

TSMC reported income slipped 10% from a 12 months in the past to NT$480.84 billion, whereas internet earnings fell 23.3% from a 12 months in the past to NT$181.8 billion. The firm had beforehand forecast second-quarter income between $15.2 billion and $16 billion.

TSMC mentioned business was impacted by macroeconomic headwinds “which dampened the end market demand, and led to customers’ ongoing inventory adjustment.”

This is the corporate’s first quarterly internet earnings decline for the reason that second quarter of 2019.

TSMC is the highest producer of the world’s most superior processors, together with the chips discovered within the newest iPhones, iPads and Macs. But demand for shopper electronics has plunged post-pandemic.

Global demand for laptops and smartphones spiked throughout Covid-19 lockdowns, spurring smartphone and PC makers to stockpile chips. Now these corporations are grappling with extra inventories as shoppers reduce on purchases of those items because of rising inflation. This has led to a fall in costs for chips.

In May, TSMC’s largest buyer Apple reported general gross sales fell for the second quarter in a row.

The world smartphone market plummeted 11% in the second quarter in contrast with a 12 months in the past, in keeping with a report revealed Tuesday by information insights supplier Canalys.

But Canalys mentioned there are indicators pointing to a restoration within the smartphone market.

“The smartphone market is sending early signals of recovery after six consecutive quarters of decline since 2022,” mentioned Le Xuan Chiew, analyst at Canalys. “Smartphone inventory has begun to clear up as smartphone vendors prioritized cutting inventory of old models to make room for new launches.”

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