TSMC Experiences Mixed Results Amid Slowing Chip Demand and Geopolitical Tensions

TSMC's net income increased by 2.1% to 206.99 billion Taiwan dollars, higher than Reuters' estimates of T$192.5 billion. Net sales also grew by 3.6% to T$508.63 billion, which was at the lower end of a previous forecast. Earnings per share, on the other hand, for TSMC came in at T$7.98, slightly higher than last year's T$7.82 per share.

However, sales and net income fell significantly compared to the previous quarter, suggesting a slowdown in semiconductor demand due to worsening global economic conditions.

In January, TSMC had already warned about this decrease in demand and announced plans to reduce capital spending in 2023 to between $32 billion and $36 billion, down from $36.3 billion in the previous year.

Despite expecting a slowdown in demand during the first half of 2023, TSMC believes that the latter half of the year could see a rapid increase, especially as more companies adopt artificial intelligence, which requires significant computer infrastructure.

However, political risks from the tension between Taiwan and China have also caused some investors to become more cautious towards TSMC. The company is also looking to move production outside Taiwan, with plans for a $40 billion factory in Arizona.

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