Share: twitterTweet facebookShare

Apple Supplier TSMC Says Demand for Smartphones and PCs Dropping: Report

Share: twitterTweet facebookShare

Taiwan Semiconductor Manufacturing Co. (TSMC), one of Apple’s biggest suppliers and the largest chipmaker in the world, is seeing signs of slowing demand for smartphones, PCs, and other consumer electronics, the company’s chairman said on Wednesday (via¬†Nikkei Asia).

The news comes just days after Apple was found to have cut production targets for its new iPhone SE, a product that was originally expected to ship around 30 million units in its first year alone, by roughly 20% due to waning demand and price inflation. The Cupertino, California-based tech giant has also reined in production goals for AirPods.

On Wednesday, analysts for the Bank of America said iPhone demand is still strong despite Apple’s recent production cuts.

The slowdown is emerging in areas “such as smartphones, PCs, and TVs, especially in China, the biggest consumer market,” said TSMC Chairman Mark Liu.

Liu also talked about how the rising cost of components and raw materials is ballooning production costs for chipmakers and the tech sector as a whole. Pricing for silicon wafers, for example, is expected to increase by up to 25% by 2025.

“Such pressure could eventually be passed on to consumers,” the TSMC chairman said during an industry event where he was speaking in his capacity as chair of the Taiwan Semiconductor Industry Association.

“Everyone in the industry is worried about rising costs across the overall supply chain… The semiconductor industry already and directly experienced that cost increase,” added Liu, noting that the industry is also weathering macroeconomic concerns from Russia’s invasion of Ukraine and the latest COVID-19 outbreak in China.

TSMC, like the rest of the chipmaking industry, has been struggling to keep up with demand amid a global chip shortage that it expected would carry on well into this year. But just as semiconductor supply is starting to show signs of easing up, TSMC is foreseeing hampered demand.

Even so, the semiconductor giant is seeing steady demand from some sectors of the market and does not plan on changing its growth target or capital expenditure plans for this year.

“Despite the slowdown in some areas, we still see robust demand in automotive applications and high-performance computing as well as internet of things-related devices,” said Liu. “We still cannot meet our customers’ demand with our current capacity. We will reorganize and prioritize orders for those areas that still see healthy demand.”

TSMC in January said it aims to grow by 25% or higher in U.S. dollar terms for revenue this year. The chipmaker also expects to spend a record $44 billion in capital expenditure during 2022.

Share: twitterTweet facebookShare