TSMC may have to cut back on capital spendingEnglish 

TSMC may have to cut back on capital spending

Second-quarter revenue, initially reported at $18.2 billion, hit the upper end of TSMC’s own forecast and ultimately beat market expectations of $17.7 billion. Declining demand for a certain line of semiconductor components is still forcing TSMC to cut capital expenditures, the cost of which is built on future market growth.

Image source: TSMC

Recall that this year TSMC plans to increase revenue by 30% and allocate 40-44 billion dollars for capital construction needs. Next year, TSMC expects to spend at least $40 billion for similar purposes, but so far the projections have not been officially confirmed. although the relevant announcements are expected to be made by the end of next week, at the company’s quarterly event.

New Street Research experts do not rule out that current market trends threaten not only TSMC’s own revenue forecast, but also the company’s capital expenditures. Producer costs are sure to rise in the short term, and the scope for price manipulation isn’t that great, so cutting capital expenditures to build new plants could be a reasonable alternative for TSMC. In addition, the demand for well-known products has started to decrease, and production volumes do not need to be increased at the same pace.

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