Foreign brokerages gave mixed reactions after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) cut its capital expenditure budget for this year by about 10 to 18 percent, due to short-term market uncertainty.
TSMC during an investors’ conference on Thursday reduced its capital expenditure forecast to US$36 billion from an earlier estimate of US$40 billion to US$44 billion.
A European brokerage said it expects the figure to fall further to US$34 billion next year.
Photo: Chiang Ying-ying, AP
The chipmaker’s announcement came as the sector tackles weak global demand due to ongoing inventory adjustments and central banks raising key interest rates to fight fast-growing inflation.
TSMC said it expects capacity utilization for its 6-nanometer and 7-nanometer processes to slow down in the fourth quarter of this year.
The weakness is likely to extend into the first half of next year, due to falling demand for smartphones and PCs, and delayed product launches by customers, it said.
The European securities house said that Washington’s ban on US chip exports to China would drag down TSMC’s sales by 1 to 2 percent next year.
A US securities firm said the chipmaker’s reduction of capital expenditure confirms the presence of significant uncertainties ahead.
Another US brokerage said that it agrees with TSMC’s assessments on the possible effects of the export ban and that ongoing inventory adjustments in the global semiconductor industry would continue until the first half of next year.
TSMC has said it expects inventory levels to return to normal in the second half of next year.
A Japanese brokerage said that it was impressed by TSMC’s third-quarter results after the chipmaker posted NT$280.87 billion (US$8.8 billion) in net profit, or earnings per share of NT$10.83.
Although weakening demand is expected to reduce the company’s capacity utilization in the first half of next year, it is still likely to outperform its peers, the Japanese brokerage said.
Separately, the US International Trade Commission on Friday said that it would investigate TSMC over accusations that it infringed on patents held by New York-based Daedalus Prime LLC.
The commission would also investigate South Korea’s Samsung Electronics Co and US-based IC designer Qualcomm Inc on two separate complaints filed with the agency by Daedalus Prime on Sept. 13.
Daedalus Prime has accused the three companies of contravening Section 337 of the US Tariff Act of 1930 by importing and selling in the US integrated circuits and mobile devices covered by its patent, the agency said.
The probe would cover Samsung’s Galaxy S20 FE and Galaxy A71 5G smartphones, tablet computers and smart watches, as well as components including chips produced by TSMC for Qualcomm, US media have reported.
Intel Corp developed the patents in question, which Daedalus Prime then obtained, the reports said.
The agency is also investigating patent infringement claims made by Daedalus Prime against Mercedes-Benz USA LLC, NXP USA Inc and Avnet Inc.
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