TSMC might be the largest foundry in the world, and it might count Apple as its biggest customer, but that doesn’t mean that it is guaranteed to report rising profits every quarter. The company announced today that it had a third-quarter profit of NT$211 billion ($6.69 billion). That was a year-over-year decline of 24.87% and the biggest annual decline in five years. Revenue also declined to NT$546.73 ($17.28 billion), a drop of 10.83% on an annual basis.
During the second quarter, TSMC reported a decline in profits for the first time in four years as consumers continued to slow down their purchases of consumer electronics. This has been a trend ever since the pandemic started to wind down. However, analysts believe that smartphone manufacturers and other producers are ready to re-stock their inventories of chips which should lead to a rebound.
TSMC reported its largest earnings decline in five years
TSMC CEO C.C. Wei commented on the earnings report and said, “Due to the persistent weaker overall macroeconomic conditions and slow demand recovery in China, customers remain cautious in their inventory control. That’s why we expect the inventory digestion to continue in the fourth quarter. Having said that, we are observing some early signs of demand stabilization in the PC and smartphone market.”