TSMC expects further reduction in revenue

 TSMC expects further reduction in revenue

Advanced technology: Chipmaker believes it will benefit significantly from the growth of models based on 5G, high performance and intelligence

444 TSMC yesterday forecast another 10% contraction in revenue this year and said there was not strong revenue demand and not enough power this year. Global economic growth and higher pressures than expected.

The world's largest contract chip maker in April predicted revenue this year to fall by half-digits from last year.

As customers are wary of using non-essential items such as smartphones or computers, TSMC said its customers are cautious about managing inventory, but inventory needs to improve to be healthy this quarter.

"We see something different, the macro [economy] is weaker than we thought.

Three months ago we had great hope. We are not now. Another example is that China's economic recovery is stronger than we thought. Final job demand is not really growing as we would like. "TSMC CEO C.C.

Wei Zhejia told investors at the company's quarterly earnings conference.

"Although we have good demand for AI processors, it is still not enough to impact the macro impact," Wei said, adding that AI applications will be the only growth area in the second half of the year.

The chipmaker said it will follow its annual growth (CAGR) revenue target of 15% to 20% for the next few years, despite the decline this year. The chipmaker's confidence is based on its belief that 5G will be one of the main beneficiaries of the growth in electronics, computing efficiency and artificial intelligence, driven by the use of semiconductors all made with advanced technology.

Nvidia Inc. TSMC, which uses 3nm technology to manufacture AI graphics processors for AI, said AI chips now account for about 6% of the company's revenue, including AI central processing units, AI accelerators, and application-specific applications (ASICs) for AI applications.

Wei said that with smart chips developing rapidly with an annual growth rate of 50%, revenue from smart chips will increase to 12% of total revenues of chip companies or 13% of total revenues of chip companies in the next five years.

The growth will come as artificial intelligence grows from today's servers to multiverses and end devices, he said.

TSMC, commenting on building production capacity abroad, said that it will delay mass production of its 12-inch wafer mill in Arizona to 2025 from the end of next year.

TSMC plans to manufacture 4nm chips at the factory.

TSMC chairman Liu Deyin said yesterday: "We ran into some problems because there were no skilled workers with the expertise needed to install equipment in large semiconductor centers."

The chipmaker said it has sent experts from Taiwan to the US to train skilled workers to overcome the challenges.

Liu said that new construction in Japan is expected to be put into service by the end of next year. TSMC is considering setting up a factory in Europe to make chips for cars with its partners and customers.

In the short term, TSMC expects a slightly more seasonal increase than usual, with revenue expected to grow between $16.7 billion and $17 billion.

5 billion for the quarter. This includes an increase of 6.5% to 11.6% from the previous quarter's $15.68 billion.

Gross margin will drop to 53.5%, down from 54.1% in the previous quarter to 51.5% this month due to 3nm chip production.

Chipmaker yesterday reported a 23% drop in revenue over the past three months.

It was NT$181.79 billion (US$5.85 billion), up 3% year-on-year and down 12.2% in the third quarter. Earnings per share fell to NT$7.

01 yuan was NT$9.14 a year ago and NT$7.98 in the first quarter.

Revenues fell 10% YoY and 5% QoQ to NT$480.84 billion, with performance and smartphones declining, including one of the two most profitable.