Taiwan chipmaker logs milestone
Taiwan Semiconductor Manufacturing Company operates the world’s largest silicon wafer factories and produces some of the most advanced microchips used in everything from smartphones and cars to missiles
TAIPEI, Taiwan (AFP) — Taiwanese chip giant TSMC recently reported record fourth-quarter net profits, but also predicted slowing sales for the start of 2023 as a potential recession dampens global demand.
Taiwan Semiconductor Manufacturing Company operates the world’s largest silicon wafer factories and produces some of the most advanced microchips used in everything from smartphones and cars to missiles.
It is regarded as a global economic bellwether because so many of its chips are in such a wide array of devices.
Net profit for the fourth quarter of 2022 hit $9.7 billion (TW$296 billion) compared to $4.2 billion for the same period a year earlier, a new record.
But the company predicted first-quarter 2023 sales of just $16.7 billion to $17.5 billion — figures that would constitute the first revenue decline in four years.
“Moving into first quarter 2023, as overall macroeconomic conditions remain weak, we expect our business to be further impacted by continued end market demand softness, and customers’ further inventory adjustment,” vice president Wendell Huang said in the earnings release report.
The global semiconductor industry has been upended both by an ongoing economic slowdown dampening demand and renewed trade frictions between the United States and China.
Moving into first quarter 2023, as overall macroeconomic conditions remain weak, we expect our business to be further impacted by continued end market demand softness, and customers’ further inventory adjustment.
Billions were wiped from companies’ valuations worldwide in October after Washington announced new measures to limit China’s access to high-end semiconductors with military uses.
Despite reporting continuously strong profits, TSMC — Taiwan’s most valuable company—saw its share price fall 27 percent last year.
It is up 7.4 percent so far this year.
While chipmakers globally are bracing for dampened demand, TSMC is more shielded from a downturn in part because it produces some of the most advanced and smallest chips, which are still highly sought after and in short supply. Orders for Spectre, its first all-electric car that launches later this year, beat expectations.