TSMC cut capex due to tool delays and sluggish demand. cautious outlook

Third Quarter Earnings $280.9 billion vs $265.64 Billion Analyst Forecast Third Quarter Revenue to $20.23 Billion, Up 36% Year-on-Year Fourth Quarter Revenue Forecast 29% to $19.9 Billion to $20.7 Billion TAIPEI, Oct. 13 ( Reuters) – Taiwanese chip maker TSMC (2330.TW) cuts annual investment budget by at least 10% through 2022, leaving a more cautious note than usual about upcoming demand. Challenges posed by rising inflation costs and forecasting chip declines next year TSMC CEO CC Wei said on Thursday that it had obtained a one-year approval for a plant in Nanjing, China. , but Washington is expected to save some foreign companies operating in China. Register now for unlimited access to Reuters.com.Register”Based on our first readings and customer feedback, the new regulation sets a threshold of control in very advanced specifications used primarily for AI or supercomputing applications. So our initial assessment is that the impact on TSMC is limited and manageable,” said Wei. Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest chip maker, manufactures most of its chips in Taiwan. Wei said in a media call that TSMC is more conservative in its investment plans for 2023. In creating the world’s most advanced chips for high-end customers such as Apple Inc (AAPL.O) and Qualcomm Inc (QCOM.O), TSMC’s dominance is dominated by AMD (AMD.O) and Micron Technology Inc (MU.O). . However, the Taiwanese company’s comments on Thursday were more in line with industry concerns over China’s decades of high inflation, interest rate hikes and COVID-19 lockdowns that have squeezed the consumer electronics market. Tool’s Asia’s most valuable publicly traded company, YSTSMC, is expected to increase its capital in 2022. Reduced capex to approximately $36 billion. In July, the company said it would omit the lower end of its previous guidance of $40 billion to $44 billion this year, and delay some of its costs until next year as the delivery of some chip manufacturing equipment was delayed. CFO Wendell Huang said in a media call that “a large portion of the change is due to capacity optimization according to the current medium-term outlook, and the other half is due to ongoing tool delivery issues.” TSMC’s revenue grew 29% to $19.9 billion to $20.7 billion in the fourth quarter compared to $15.74 billion a year ago. The company said its data center and automotive businesses have remained stable for the time being and that the overall business will be more resilient than others.” Wei said, “TSMC is still a growing year and the entire industry will probably decline.” TSMC has seen little impact from the sector’s current downcycle and said long-term demand for the chip “has seen solid growth.” Thank you instead. Businesses purchasing high-performance computing chips for use in 5G networks and data centers, as well as increased use of chips used in gadgets and vehicles. Net income for the third quarter at the end of September increased by T$280.9 billion ($8.81 billion) compared to the same period last year. Quarterly revenue increased 36% to $20.23 billion, an average of T$265.64 billion across 21 analyst estimates compiled by Refinitiv.Revenue, compared to $20.6 billion from TSMC’s previous estimate of $19.98 billion. China accounted for 8% of revenue in the third quarter from 13% in the second quarter, and TSMC’s share price has fallen nearly 36% this year to a market cap of $323.7 billion. On Thursday, the stock was down 0.6% compared to a 2.1% decline in the benchmark index (.TWII). ($1 = 31.8870 Taiwanese Dollars) Register Now for Unlimited Access to Reuters.com Report by Ben Blanchard and Sarah Wu Sayan by Sayantanani Ghosh; Edited by Christian Schmollinger, Edmund Klamann and Ana Nicolaci da CostaOur Standard: Thomson Reuters Trust Principle.
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