Taiwan Semiconductor, the world’s largest contract chip maker, announced a decline in its second-quarter profit and revenue due to a downturn in demand for chips in electronic devices.
Financial Results
The company’s second-quarter profit reached 181.80 billion Taiwanese dollars ($5.84 billion), reflecting a 23% decrease compared to the same period last year. Additionally, Taiwan Semiconductor’s revenue experienced a 10% drop, amounting to 480.84 billion Taiwanese dollars or $15.68 billion USD.
Impact of Global Economic Conditions
Chief Financial Officer Wendell Huang attributed the second-quarter performance to global economic conditions, which negatively affected the end market demand and led to ongoing inventory adjustments by customers.
TSMC’s Dominance in the Market for High-end Chips
TSMC holds a dominant position in the high-end chip market and is responsible for manufacturing key processors for major companies such as Apple (ticker: AAPL), Qualcomm (QCOM), and Advanced Micro Devices (AMD).
Outlook for Third Quarter 2023
Despite facing challenges, Huang expressed confidence in the company’s future prospects, citing the anticipated strong ramp-up of their 3-nanometer technologies. However, he acknowledged that customer inventory adjustments will continue to have an impact.
Projections for Third-Quarter Performance
For the upcoming third quarter, TSMC expects revenue to range between $16.7 billion and $17.5 billion. The company also forecasts an operating profit margin of 38% to 40%.
