ANN/THE STRAITS TIMES – Chipmaker TSMC reported a forecast-beating 78 per cent rise in quarterly profit yesterday, as strong sales of advanced chips helped it defy a broader industry downturn that battered cheaper commodity chips.
The world’s largest contract chipmaker is a rare bright spot in the global tech industry which is grappling with worsening consumer demand brought about by decades-high inflation rates, rising interest rates and economic downturn.
Rival Samsung Electronics’ quarterly profit tumbled two-thirds to an eight-year low, with the South Korean firm blaming a weakening global economy which hammered memory chip prices and curbed demand for electronic devices.
TSMC’s dominance in making some of the most advanced chips for high-end customers such as Apple has shielded it from downturn. Still, it cut its 2023 capital expenditure plan yesterday, underscoring worsening demand outlook.
The chipmaker now expects to spend USD32 billion to USD36 billion, versus USD36.3 billion in 2022, and sees first-quarter revenue in a range of USD16.7 billion to USD17.5 billion, compared with USD17.57 billion a year earlier.
“We have confidence in the second half the business would rebound,” boosted by product launches including for technology such as artificial intelligence, CEO CC Wei said yesterday.
“We expect the whole industry to drop slightly but TSMC to grow slightly” in 2023, he said.
TSMC, Asia’s most-valuable listed firm and backed by billionaire Warren Buffett’s investment conglomerate Berkshire Hathaway, has repeatedly said business would continue to benefit from a “mega-trend” of demand for high-performance computing chips for 5G networks and data centres, as well as increased use of chips in gadgets and vehicles.
It reiterated yesterday slower demand was a cyclical issue and 2023 overall would be a slight growth year for the company.
For October-December, TSMC booked record net profit of TWD295.9 billion from TWD166.2 billion a year earlier.