Taiwan Semiconductor Manufacturing Company (TSMC) has recorded a revenue fall of 10% compared to numbers last year. Overall, the company’s second quarter earnings have seen a 23% decline.
TSMC is the world’s largest chipmaker and ranked eighth overall on GlobalData’s 2023 Q1 thematic scorecard for semiconductor manufacturers.
According to Reuters, TSMC was quoted as saying that it expects its third quarter revenue to pick up, despite dealing with a worker shortages. The company’s skills shortage is not expected to ease soon, as the Financial Times reported that job postings exceeded available workers by 4 million.
After announcing its second quarter financial results, TSMC also stated in a conference call yesterday (July 20) that it would delay its construction of a new factory expansion in Arizona.
TSMC has already pledged $40bn towards the expansion, a move which the New York Times reports has “stoked internal apprehension, with high costs and managerial challenges.”
Both the drop in financial results and subsequent delay of the Arizona expansion have given investors a reminder of the difficulties in semiconductor production during an ongoing global technology slump and a trade war between the US and China.
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In conversation with the Financial Times, TSMC blamed the virality of ChatGPT for creating a “sharp rise in demand for AI-related processors” that has led to a capacity shortage.
However, whilst generative AI continues to boom, TSMC has made it clear that it expects “all other product segments- such as chips for smartphones, automotive and industrial applications- to shrink.”
TSMC already struggled during the 2021 chip shortage as demand for consumer electronics and computers increased dramatically during the Covid-19 pandemic.