TAIPEI: Taiwanese chipmaker TSMC<\/a>'s quarterly profit surged 80% on strong sales of its chips<\/a> used in data centres and electric cars, but the company cut its annual investment budget by at least 10% and struck a more cautious tone on upcoming demand.
TSMC's dominance in making some of the world's most advanced chips for high-end customers such as Apple Inc<\/a> and Qualcomm<\/a> Inc had shielded it from the downturn flagged by chipmakers including AMD and Micron Technology Inc.
But Taiwan Semiconductor Manufacturing Co Ltd<\/a> (TSMC) flagged on Thursday challenges from rising inflationary costs next year and cut its capital expenditure for 2022 to around $36 billion.
It comes as the chip industry is dealing with weak demand, spurred by decades-high inflation, rising interest rates and COVID 19-related lockdowns in China that have hurt the PC and smartphone market as businesses and consumers rein in expenses.
In July, the company said it would skim the lower end of its previous guidance of $40 billion to $44 billion this year, with some expenses pushed to next year because of a delay in the delivery of some chip-making equipment.
For the fourth-quarter, the world's largest contract chipmaker TSMC forecast a 29% rise in revenue to between $19.9 billion and $20.7 billion, compared with $15.74 billion a year earlier.
The company, Asia's most valuable listed firm, said its data centre and auto businesses remained steady for now, and that its business overall will be more resilient than the broader chip industry that will likely decline in 2023.
Net profit for the third quarter ended September rose to T$280.9 billion ($8.81 billion), compared with the T$265.64 billion average of 21 analyst estimates compiled by Refinitiv.
Revenue for the quarter climbed 36% to $20.23 billion, versus TSMC's prior estimated range of $19.8 billion to $20.6 billion.
Shares in TSMC have fallen almost 36% so far this year, giving it a market value of $323.7 billion. The stock fell 0.6% on Thursday, compared with a 2.1% fall for the benchmark index.
Just three months back, TSMC had said it has seen little impact from the current down cycle in the sector and long-term demand for its chips was \"firmly in place\" thanks to businesses shopping for high-performance computing chips used in 5G networks<\/a> and data centres, as well as an increased use of chips in gadgets and vehicles.
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