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TSMC Flags 10% Fall in 2023 Sales, Spending at Low End of Forecast

  • Sees 2023 spending at low end of $32-$36 bln forecast
  • Q2 profit T$181.8 bln vs T$172.55 bln analyst view
  • Q2 revenue down 13.7% on year at $15.68 bln
  • Experiencing labour challenges at Arizona fab

TAIPEI, July 20 (Reuters) - Taiwanese chipmaker TSMC forecast a 10% drop in 2023 sales on Thursday after reporting a 23% fall in second-quarter earnings as global economic woes dented demand for chips used in applications as varied as cars, cellphones and servers.

The world's largest contract chipmaker estimated investment spending for this year at the lower end of a previous estimate of $32-$36 billion amid challenges from rising inflationary costs and an uncertain global economic outlook.

Taiwan Semiconductor Manufacturing Co Ltd said, however, it expects third-quarter revenue to pick up to around $16.7 billion-$17.5 billion, from $15.68 billion in the previous quarter, and flagged robust demand for its 3nm technology.

The chipmaker said it was grappling with a shortage of specialist workers at its Arizona fabrication plant and N4 production would be delayed to 2025.

TSMC late last year began construction of a second chip factory in Arizona which will start production in 2026, using advanced 3 nm technology, supporting Washington's plans for more chip-making at home. Its total investment in the U.S. project amounts to $40 billion.

For the second quarter ended June, TSMC, a major Apple Inc supplier, reported a 23.3% fall in net profit - beating forecasts - although it was its first on-year drop in quarterly profit since the second quarter of 2019 when it fell 7.6%.

TSMC saw April-June net profit drop to T$181.8 billion ($5.85 billion) from T$237.0 billion a year earlier.

That compared with the T$172.55 billion average of 21 analyst estimates compiled by Refinitiv.

TSMC, Asia's most valuable listed company, said second-quarter revenue dropped 13.7% year-on-year to $15.68 billion, in line with the company's previous forecast.

As the biggest maker of chips that power products as varied as phones, cars and advanced computers, TSMC must navigate an uncertain industry outlook and a U.S.-China chip spat that could make it vulnerable. 

TSMC's Taipei-listed shares fell 27.1% in 2022, but are up around 30% so far this year, giving the chipmaker a market value of $486.5 billion. The stock fell 0.3% on Thursday versus a 0.3% rise in the benchmark index.

($1 = 31.0580 Taiwan dollars)

Reporting by Yimou Lee and Sarah Wu; Writing by Ben Blanchard; Editing by Jacqueline Wong & Shri Navaratnam

Source: Reuters

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