Proactive Investors - Semiconductor stocks struggled Thursday morning after Taiwanese chipmaker TSMC announced a projected 10% drop in sales for 2023.
The largest contract chipmaker in the world also said investment spending is likely to be in the lower end of its previous $32 billion to $36 billion forecast, pointing to lower demand for chips amidst economic headwinds. That decline has not been nearly offset by rising demand for artificial intelligence (AI) chips, the company said.
"The short-term frenzy about the AI demand definitely cannot extrapolate for the long term. Neither can we predict the near future — meaning next year — how the sudden demand will continue or flatten out," TSMC chairman Mark Liu said.
TSMC also reported a 22% dip in second-quarter profit to US$5.85 billion from $7.63 billion, plus a revenue decline of nearly 14% to $15.68 billion.
Shares of the company slid 3.5% before the opening bell Thursday.
The company did signal that it expects third-quarter revenue to rise to between $16.7 billion and $17.5 billion, up from $15.68 billion in the previous quarter.
However, there is a concern for the major Apple (NASDAQ:AAPL) supplier that the iPhone launch this holiday season will be softer than in previous years, which is compounded by rising electricity costs, the company said.
Other chipmakers lagged Thursday morning as shares of Nvidia, Qualcomm (NASDAQ:QCOM) and AMD all fell 1% or more.