TSMC, the Taiwanese chip manufacturing giant, faced significant challenges in the third quarter of this year, as the global economic landscape and industry dynamics took a toll on the company’s financial performance.
The company reported a 14.6 percent decrease in its third-quarter revenue, amounting to $17.3 billion. This figure fell within the range that TSMC had previously forecasted, which was between $16.7 billion and $17.5 billion.
TSMC in its earnings report said shipments of 3-nanometer accounted for 6 percent of total wafer revenue; 5-nanometer accounted for 37 percent; 7-nanometer accounted for 16 percent. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 59 percent of total wafer revenue in the third quarter.
The adverse economic conditions and reduced demand for chips used in various applications, including automotive, smartphones, and data servers, were major contributing factors to TSMC’s woes. These challenges were compounded by the high base set by the company’s performance in the previous year.
As the world’s largest contract chipmaker and a key supplier to tech behemoth Apple, TSMC’s third-quarter net profit experienced a significant decline, plummeting by 24.9 percent. The net profit for the July-September period came in at T$211 billion, down from T$280.9 billion during the same period in the previous year.
Additionally, TSMC revealed that its capital expenditure for the third quarter amounted to $7.1 billion, marking a decrease from the $8.17 billion spent in the previous quarter. This strategic financial adjustment reflects the need to manage resources efficiently in the ever-evolving semiconductor industry.
In the face of these challenges, TSMC must navigate a complex and uncertain industry outlook. Moreover, the ongoing U.S.-China chip dispute adds another layer of complexity that could potentially expose the company to vulnerabilities.
As the world’s foremost producer of advanced chips, TSMC’s performance in the coming quarters will be closely monitored as it continues to serve as a barometer for the health and resilience of the global semiconductor industry amidst an array of formidable obstacles.