TSMC’s 2Q Net Profit Drops 23% as Global Demand for Chips Slows Down

Profit of the world’s largest and advanced chipmaker plunged in the second quarter as demand for consumer electronics around the globe continues to drop.

Taiwan Semiconductor Manufacturing Company (TSMC) reported a net profit of NT$181.8 billion in the second quarter, compared to NT$237 billion in the same period of last year (-23.3%), but still above consensus for NT$165 billion from Refinitiv.

Meanwhile, revenue came in at  NT$480.84 billion, compared to NT$534 billion reported last year and NT$478 billion expected.

TSMC flourished during the global Covid-19 pandemic, seeing high demand for laptops and smartphones, especially during the lockdown. However, those demands started to subside as the world recovered from the crisis and people were going out more.

High inflation also forces consumers to cut back on buying discretionary products, leading to a drop in prices for chips.

Earlier, data insights provider Canalys reported that the global smartphone market dropped 11% in the second quarter when compared to the same period of last year.

Apple, the producer of iPhone, also reported a drop in sales for the second straight quarter in May.