TAIPEI (Reuters) – Taiwanese chipmaker TSMC reported a 24.9% decline in net profit for the third quarter as a result of global economic challenges impacting the demand for chips used in various industries, such as automobiles, smartphones, and servers. The company, which is the world’s largest contract chipmaker and a significant supplier for Apple Inc, recorded a net profit of T$211 billion for the period from July to September, compared to T$280.9 billion during the same period last year.
Despite the significant fall in net profit, the company’s performance exceeded market expectations. TSMC’s net profit surpassed the T$195.5 billion forecast of the LSEG SmartEstimate, which gives more weight to forecasts from analysts who have a proven track record of accuracy.
TSMC’s financial results are a reflection of the challenges faced by companies in the semiconductor industry. The global economic downturn has led to decreased demand for chips in various sectors. The automotive industry, for instance, has experienced a decline in sales, resulting in reduced demand for chips used in car manufacturing. Similarly, the smartphone market has also witnessed a slowdown, impacting the need for chips used in mobile devices.
TSMC’s position as a major supplier for Apple Inc has also been affected by the declining demand for iPhones. As consumers hold onto their smartphones for longer periods, the demand for new devices and the chips that power them has decreased. Additionally, geopolitical and trade tensions have further dampened the global economy, adding to the challenges faced by TSMC and other chipmakers.
Despite the difficult market conditions, TSMC remains optimistic about its future prospects. The company is investing in research and development to develop more advanced semiconductor technologies, such as 5G and artificial intelligence. These technologies are expected to drive future demand for chips and provide growth opportunities for TSMC.
TSMC’s financial performance is closely watched by investors and industry analysts as it is considered a bellwether for the semiconductor industry. The company’s ability to navigate through challenging market conditions and continue to innovate will be crucial in determining its long-term success.
Overall, TSMC’s third-quarter net profit decline highlights the impact of global economic challenges on the semiconductor industry. However, the company’s performance surpassing market expectations indicates its resilience and ability to adapt to changing market conditions.
Reporting by Sarah Wu and Yimou Lee; Editing by Muralikumar Anantharaman
