36.1 C
Delhi

TSMC cuts its 2023 capital expenditure due to poor demand after recording a strong Q4 2022

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker, is a rare bright spot in a global tech industry grappling with worsening consumer demand caused by decades of high inflation, rising interest rates, and an economic downturn.

On Thursday, TSMC reported a 78% increase in quarterly profit, exceeding expectations, as strong sales of advanced chips helped it overcome a broader industry downturn that battered cheaper commodity chips.

Samsung Electronics Co Ltd’s quarterly profit fell two-thirds to an eight-year low, blaming a weakening global economy for lowering memory chip prices and reducing demand for electronic devices.

TSMC
credit: reuters

TSMC’s dominance in producing some of the most advanced chips for high-end customers like Apple Inc. has protected it from a downturn. Nonetheless, it reduced its capital expenditure plan for 2023 on Thursday, highlighting the worsening demand outlook.

- Advertisement -TechnoSports-Ad

The chipmaker now expects to spend $32 billion to $36 billion, up from $36.3 billion in 2022, and revenue in the first quarter of $16.7 billion to $17.5 billion, up from $17.57 billion a year ago.

TSMC, Asia’s most valuable listed company and backed by billionaire Warren Buffett’s investment conglomerate Berkshire Hathaway Inc, has repeatedly stated that it will 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 on Thursday that slower demand was a cyclical issue and that 2023 would be a year of slight growth for the company. Late last year, TSMC began construction on a second chip factory in Arizona, which will begin production in 2026 using advanced 3 nm technology. Its total investment in the project in the United States is $40 billion.

- Advertisement -TechnoSports-Ad
TSMC
credit: reuters

CEO Wei stated that TSMC was considering building a second fab in Japan, and that it was also considering building a speciality fab focused on the auto industry in Europe, without providing further details.

TSMC reported a record net profit of T$295.9 billion ($9.72 billion) from October to December, up from T$166.2 billion the previous year.

In comparison, the average of 21 analyst estimates compiled by Refinitiv was T$289.44 billion. Revenue increased 26.7% to $19.93 billion, exceeding TSMC’s previous forecast range of $19.9 billion to $20.7 billion. The share price of TSMC fell 27.1% in 2022, but is up 8.5% this year, giving the company a market value of $412.78 billion. The stock gained 0.4% on Thursday, while the benchmark index fell 0.1%.

TSMC reported a record net profit of T$295.9 billion ($9.72 billion) from October to December, up from T$166.2 billion the previous year. In comparison, the average of 21 analyst estimates compiled by Refinitiv was T$289.44 billion.

Also Read:

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.
TechnoSports-Ad

Popular

TechnoSports-Ad

Related Stories

More from author

Save from net YouTube: How to download free YouTube videos as of March 29

Save from net youtube: The Ultimate Guide SaveFrom.net is a free online video downloader that allows you to save videos from websites such as...

Jio Caller Tune Set: How to Set as of March 29.

Jio caller tune set: Reliance Jio has made a splash in the Indian telecom business. Jio is doing everything to revolutionize our smartphone experience,...

The list of Airtel SMS packs as of March 29, 2024

Check out the list of Airtel SMS packs, including costs and validity information. We have shared a list of Airtel SMS recharge plans that...

My Jio Recharge Plans as of March 29, 2024: Top trending plans from Jio

My Jio Recharge Plans: Since its establishment in 2016, Reliance Jio has made a remarkable impact on the Indian te­lecommunications industry. The company has...