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TSMC financial woes raise broader concerns

Taiwan Semiconductor Manufacturing Company (TSMC) has joined a growing roll-call of tech companies issuing a profits warning.

The company has announced that it will be cutting full year investment and said that it expects its sharpest quarterly revenue fall in over ten years.

The world’s largest contract chipmaker, TSMC has said that it is facing a massive build up in inventory as demand for smartphones tumbles and, as a result, it expects its quarterly revenues to fall by over 14 percent to $7.3billion.

In turn, it said that it would be cutting investment by several hundred million dollars this year.

Smartphone shipments in China are expected to fall by over 12 percent in 2018, which is the world’s biggest market and are likely to fall by a further 3 percent this year, according to analysts.

TSMC appears to have been impacted by this slowdown and a wider global fall in smartphone demand and the news suggests tough times ahead for its clients including Apple, Qualcomm and Huawei.

When the Chinese mobile market sneezes, the world’s technology industry looks like it’ll be catching a cold!

Author
Neil Tyler

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