TSMC Cuts 2023 CapEx As Apple Demand Softens

Taiwanese chipmaker TSMC has warned that first-quarter revenue would drop as much as 5% and it would slash annual investment as the major Apple Inc. supplier expects softer demand due to a slowing global economy, Yimou Lee and Sarah Wu reported for Reuters.

Photo Insert: TSMC said its capital expenditure in 2023 would decrease to between $32 billion and $36 billion from $36.3 billion in 2022.

The bearish outlook follows a forecast-beating 78% jump in fourth-quarter profit, underscoring the depth of a sharp slowdown in a global technology sector that is grappling with worsening consumer demand brought about by decades-high inflation rates, rising interest rates and an economic downturn.

Still, Taiwan Semiconductor Manufacturing Co Ltd. (TSMC), the world's most valuable chipmaker, forecast growth would return in the second half of this year.

"We forecast the semiconductor cycle to bottom sometime in first half and see a recovery in second half 2023," CEO C.C. Wei said, adding the rebound would be boosted by new product launches such as artificial intelligence-enabled goods.

TSMC said its capital expenditure in 2023 would decrease to between $32 billion and $36 billion from $36.3 billion in 2022.

Hopes of a recovery in the second half of the year and capex cut to manage supply sent the US-listed shares of TSMC up 7.5%. First-half revenue is seen posting a mid to high single-digit percent decline.

First-quarter revenue is expected in a range of $16.7 billion to $17.5 billion, compared with $17.57 billion a year earlier.

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